Need to conclude loan guarantee scheme for medical infra in non-metros in time, says Finance Minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on Tuesday asked all stakeholders to conclude Rs 50,000 crore Loan Guarantee Scheme for Covid-Affected Sectors aimed at shoring up healthcare infrastructure in non-metros in time to deal with any future third wave.

Observing that increasing the medical capacities in the rural areas as well as tier-II and -III towns are very critical, the finance minister said overall improvement in healthcare infrastructure is also going to help the revival of the economy.

"We need this (scheme) to be done within time. We need this to be done all over the country, especially in those parts where we have less medical infrastructure, and therefore what I would think is the Department of Financial Services together with the industry stakeholders and the banks...I think there needs to be a lot more information sharing in local areas," she said.

She emphasised the need to sensitise all stakeholders--banks, medical fraternity, pharma industry or medical devices players at the regional level and hold awareness campaigns.

The Scheme, approved by the Union Cabinet in June, would be applicable to all eligible loans sanctioned up to March 31, 2022, or till an amount of Rs 50,000 crore is sanctioned, whichever is earlier.

The finance minister said she would, through the Department of Financial Services, monitor the progress of the scheme on a weekly basis to make sure that it reaches to the ground at the earliest, because time cannot be lost out on.

"We cannot afford delays. We need this to be done at the earliest, so that capacities are ramped up for any future third wave if at all," she said while addressing a webinar to promote the loan guarantee scheme announced as part of Rs 6.29 lakh crore stimulus package announced earlier this year.

She stressed on the need to have matching skilled hands in terms of trained doctors, nurses and other technicians to handle the improved capacity.

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On the economic recovery, Sitharaman said the government is constantly discussing and engaging with the stakeholders to ensure that the revival of the economy is adequately supported.

"We are also reviving it (pandemic affect economy) in the context of, God forbid, a possible third wave. We do not want the third wave. We can't wish it away however....We are taking every step that is required to ramp up vaccination, give the country the possible scientifically tested immunity, a kind of shield with which even a variant can be faced with enough antibodies," she said.

As far as vaccination is concerned Health Secretary Rajesh Bhushan said about 65 crore doses have been administered so far.

Speaking at the occasion NITI Aayog member (health) V K Paul said there is significant shortage of health infrastructure in the country and there is a need to ramp this up.

Paul also said there is a need to double the hospital bed to 2 per thousand from the current level of 1 per thousand.

Observing that growth of private sector health infrastructure has been slow if not stagnant, he said, the industry should take advantage of this opportunity and expand their capacity.

"On one hand while we have to address the deficit we have also to look into the fact that the distribution across the country is also uniform," Financial Secretary Debasish Panda said.

It's not alone a challenge but also an opportunity for the private sector to contribute in a big way and help the government in building and creating this infrastructure by taking advantage of this credit facility at very low cost, he added.

The Union Cabinet in June approved the scheme enabling funding to the tune of Rs 50,000 crore to provide financial guarantee cover for brownfield expansion and greenfield projects related to health and medical infrastructure.

The main objective of the Loan Guarantee Scheme for Covid-Affected Sectors (LGSCAS) is to partially mitigate credit risk (primarily construction risk) and facilitate bank credit at lower rates of interest 7.95 per cent per annum.

The LGSCAS scheme is aimed at boosting medical infrastructure in the country, specifically targeting underserved areas. The scheme provides a guarantee of 50 per cent for brownfield projects and 75 per cent to greenfield projects for loans sanctioned up to Rs 100 crore, set up at urban or rural locations other than eight metropolitan tier 1 cities.

For aspirational districts, the guarantee cover for both brownfield expansion and greenfield projects shall be 75 per cent.

The second Covid wave placed enormous stress on India's healthcare infrastructure as well as livelihoods and business enterprises in many sectors. It has sharply brought out the need to enhance public and private investments in the health sector.

SBI managing director C S Setty said the average ticket size is Rs 1.2 crore so far and about 2,800 applications have been received under the scheme.

About 40 per cent sanction and disbursement is to diagnostic centres so far, he added.