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Parl Committee Displeased Again, Raises Concern with Medical Device Parks Scheme’s Progress

Written by : Jayati Dubey

February 23, 2024

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The scheme aimed to set up four medical device parks in Himachal Pradesh, Tamil Nadu, Madhya Pradesh, and Uttar Pradesh, with an outlay of INR 100 Cr each.

The Department-related Parliamentary Standing Committee on Chemicals and Fertilisers has expressed dissatisfaction with the sluggish progress in implementing the scheme to promote medical device parks.

The committee's displeasure is linked to the underutilization of funds allocated to the states. The committee, chaired by Lok Sabha member Shashi Tharoor, conveyed its concerns in the 50th report on the Promotion of Medical Device Industry earlier this month, urging the department to implement the scheme with greater seriousness.

The medical device parks promotion scheme was approved by the government on March 20, 2020, for a tenure of five years from 2020-21 to 2024-25.

The scheme aimed to set up four medical device parks in Himachal Pradesh, Tamil Nadu, Madhya Pradesh, and Uttar Pradesh, with an outlay of INR 100 Cr each for establishing common testing and laboratory facilities. The first installment of INR 30 Cr was released to these states in 2021-22.

Citing Reasons

The committee expressed unhappiness with the tardy progress and suggested exploring possibilities to expand the scheme to other states with a more vibrant medical device industry.

It emphasized that the scheme loses meaning if the respective states do not utilize the funds allocated. Regular monitoring and coordination with state agencies were deemed essential for the successful creation of common infrastructure facilities under the scheme.

In its observations, the committee noted that even a modest amount of INR 120 Cr for four states remained unspent during 2022-23, with only INR 89 Lakh utilized. It highlighted the need for remedial measures and emphasized the importance of regular monitoring to ensure the project's progress.

Budget Allocations & Utilization

For the year 2020-21, while INR 21.05 Cr was allocated, only INR 7.49 Cr was released. The entire allocation of INR 137.02 Cr for the year 2021-22 was released during the period.

The Department of Pharmaceuticals clarified that the selection of four parks was based on the scheme guidelines, and the need to cover more parks does not arise presently.

However, states like Telangana and Rajasthan are independently setting up medical device parks with their funds.

Committee's Previous Concerns

This is not the first time the committee expressed displeasure with the scheme's implementation.

In 2023, while considering the Demands for Grants for the Department of Pharmaceuticals for the year 2023-24, the committee raised concerns about the severe shortfall in the utilization of allocated funds during the fiscal year 2022-23.

It recommended that the department promptly address the matter with the respective state governments for the issuance of Utilization Certificates.

The promotion of medical device parks scheme aims to promote medical device parks by providing grants-in-aid for the creation of common infrastructure facilities (CIF).

The total financial outlay for the scheme is INR 400 Cr for the period 2020-21 to 2024-25, with INR 100 Cr per park or 70% of the CIF cost, whichever is less. The assistance is increased to 90% for the North Eastern Region and the Hill States.

The parliamentary committee's dissatisfaction underscores the challenges faced in realizing the objectives of the medical device parks scheme.

The call for greater seriousness in implementation and exploring opportunities in other states reflects the committee's commitment to addressing issues and ensuring the effective utilization of allocated funds to develop medical device infrastructure in India.

The success of such schemes plays a vital role in advancing the country's healthcare and manufacturing capabilities.


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