DoP must address the grassroots challenges of medical devices.

Monday April 11, 2022 at 12:15 pm

The Department Related Parliamentary Standing Committee on Chemicals and Fertilisers has commanded the Department of Pharmaceuticals (DoP) to ponder the different ways and means to address and resolve the various grassroots challenges faced by the players in the medical devices industry and to initiate appropriate steps to overcome them.

The Committee observed that the incentives provided under the production linked incentive (PLI) scheme for promoting domestic manufacturing of various medical devices are only for incremental sales and are in no way meant to address the significant challenges faced by these Greenfield projects, including the poor infrastructure, poor domestic supply chain and logistics, high finance costs of projects, insufficient power backup, inadequate design capabilities, little investment in R&D and skill development, etc.

“Unless these challenges are overcome, it is difficult to visualize that the domestic medical device industry can reap the real benefits out of the PLI scheme. Hence, the Committee recommends that the Department may ponder over the ways and means to address these grass-root challenges faced by the medical device industry and initiate appropriate steps thereon,” the 34th report of the Standing Committee on the Demands for Grants of Department of Pharmaceuticals (DoP) for the year 2022-23 noted.

The production linked incentive (PLI) scheme for promoting domestic manufacturing of medical devices was earlier approved by the Union Government of India on March 20, 2020, to address the challenges in manufacturing medical devices in the nation vis-à-vis other major manufacturing economies. The Union government issued specific guidelines for implementing the scheme on 29.10.2020.

The production linked incentive (PLI) scheme applies only to the Greenfield projects and is intended to boost domestic manufacturing and attract significant domestic and foreign investments in the medical devices sector. The tenure of this scheme is from the financial year 2020-21 to the financial year 2027-28, with a total financial outlay of Rs. 3,420 crore.

Under the production linked incentive (PLI) scheme, the union government will give the financial incentives to these selected companies at the fixed rate of 5% of incremental sales of medical devices manufactured in India and also covered under the specific target segments of the scheme for a total period of five years.

The Committee observed that for 2022-23, the Department of Pharmaceuticals (DoP) had been allocated Rs. 216 crore at the Budget Estimate stage is a significant enhancement compared to Rs. 3.31 crore allocated at the revised estimate stage during 2021-22.

Further, the Department of Pharmaceuticals (DoP) has approved 21 applicants under the production linked incentive (PLI) scheme. Since it is very much necessary that all the 21 applicants should commission their plants in a time-bound manner and start production and sale of medical devices for becoming eligible to get incentives under the production linked incentive (PLI) scheme, the Committee is recommending that concrete steps should be taken by the Department of Pharmaceuticals (DoP) for timely commissioning of plants by these applicants and also for ensuring complete utilization of total budgetary allocation of Rs. 216 crore for the disbursal of various incentives based on their respective production and sale of medical devices.

“A definite responsibility may be fixed on Project Management Agency in this regard. The details of progress made in the scheme’s implementation during 2022-23 should be intimated to the Committee,” asserted the report by the Committee, which Kanimozhi Karunanidhi headed.

It further recommended the Department of Pharmaceuticals (DoP) take necessary steps for the early release of the planned budgetary funds to the four medical devices parks currently being set up in Himachal Pradesh, Uttar Pradesh, Madhya Pradesh, and Tamil Nadu and research the necessity of setting up of even more medical devices parks in the country.