Med Devices Parks off to a slow start

Under-utilisation of funds for any government project or programme is always a matter of great concern. For one, it reflects the lackadaisical attitude of the officials of the department concerned. The gravity of the situation will be much higher when it comes to projects of critical importance like medical devices for which the country is dependent on imports.

Recently, a Parliamentary panel, analysing the performance of the Department of Pharmaceuticals (DoP) and the budgetary requirements and allocations in 2023-24, has raised concern over the severe under-utilisation of allocated funds for the sub-scheme of medical devices parks in the previous fiscal. It advised the department to take up the matter with the respective State governments for a speedy implementation.

The Parliamentary Standing Committee for Union Ministry of Chemicals and Fertilisers, in its latest report on Demands for Grants for the DoP for the year 2023-24, noted with great concern the severe shortfall in utilisation of allocated funds during the financial year 2022-23. Apparently, of the allocated amount of Rs. 120 crore at RE stage, the DoP could utilise only Rs 89 lakh up to February.

The Parliamentary panel was looking at various schemes including the umbrella scheme ‘Development of Pharmaceuticals Industry’, which includes promotion of medical devices parks and promotion of bulk drug parks.

The reason cited for the under-utilisation of funds was on the matching grants front as the States could not spend 60 per cent of first instalment of Rs 30 crore in order to become eligible for receiving second instalment as per the scheme guidelines.

Irrespective of the reasons, the scheme meant for promotion of medical devices parks by way of creation of common infrastructural facilities should not be subject to procedural delays. It is imperative that the DoP takes up the matter with the respective state governments without further loss of time for an early issue of Utilisation Certificates. The fact is that though this project entails substantial investment initially, the benefits accruing out of it over a period of time would also be far greater. One should remember that the 2023-24 budget estimates for the scheme is to the tune of a staggering Rs 200 crore.

The scheme was introduced essentially to reduce dependence on imports by promoting domestic manufacture of medical devices. Under the scheme, four medical devices parks have been approved in different states, including in Himachal Pradesh, Madhya Pradesh, Tamil Nadu and Uttar Pradesh. This will result in development of around 1,326 acres. Of the projected requirement of around Rs 1,221 crore, the Centre will provide a maximum grant-in-aid of Rs 100 crore each while the rest will be borne by the State governments.

It is a fact that nearly 80 per cent of the medical devices sold in the country are imported, particularly the high-end medical devices. During the financial year 2021-22 compared to the previous years, imports of medical devices grew by an alarming 41 percent as India imported medical devices worth Rs 63,200 crore in 2021-22, up by 41% from Rs. 44,708 crore in 2020-21. The imports from China grew 48% from Rs 9,112 crore in 2020-21 to Rs 13,538 crore in 2021-22. Imports from the USA also increased steeply by 48% to Rs 10,245 crore in 2021-22 from Rs 6,919 crore in 2020-21. The value of medical devices from China was nearly the same as the combined value of imports from Germany, Singapore and the Netherlands in 2021-22.

The gravity of the situation can be gauged from the fact that the increase of import of medical devices has been five-fold over a six-year period as India imported Rs12,866 crore worth of medical devices in 2016-17. It was to address this issue in the real earnest that the Centre has come out with a series of new policies to reduce India’s import dependence from 80 per cent to nearly 30 per cent in the next 10 years, and become one of the top five global manufacturing hubs for medical devices by 2047.