Minister of State for Finance Bhagwat K Karad has asked the medical fraternity to take advantage of the Rs 50,000-crore Loan Guarantee Scheme for Covid-Affected Sectors (LGSCAS), to upgrade healthcare infrastructure for dealing with any possible third wave of the coronavirus pandemic.
Under the scheme, healthcare service providers can avail loans up to Rs 100 crore at an attractive interest rate of 7.95 per cent per annum, to develop and upgrade both greenfield (fresh) and brownfield (existing) projects in other than eight metro cities, he said.
“I appeal to my doctor community to take advantage of the scheme and ramp up infrastructure so that people in small towns also get quality health services,” Karad told PTI in an interview.
Karad, himself a doctor, appreciated the scheme saying this is going to benefit the medical fraternity and also the people living in non-metro centres.
“People are saying that the third wave may hit… we don’t know when and what will happen but our doctors and medical professionals should be ready to face the challenge,” he said.
The loan guarantee scheme was announced as part of Rs 6.29-lakh-crore stimulus package by Finance Minister Nirmala Sitharaman earlier this year. The scheme, approved by the Union Cabinet in June, will 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.
On the progress of this scheme, he said it is gaining traction and banks have started receiving loan applications under it.
Meanwhile, awareness is being spread about the scheme, and the medical fraternity is being sensitised at the regional or district level about it and its benefits, he said.
He said that recently, Finance Minister Nirmala Sitharaman had a meeting with all stakeholders and pressed for expeditious implementation of the scheme.
Moreover, he said this is for capacity expansion activity, which takes time to take shape.
At the borrower’s end, there has to be a detailed project report to be made while banks have to do credit appraisal and risk assessment, he said.
Karad, however, expressed hope that this will gain further momentum in the next few weeks.
He also stressed that the medical fraternity is prompt borrowers, and data from various banks suggests that the non-performing asset (NPA) level is very low towards the advances given to professionals in the healthcare industry.
The main objective of LGSCAS is to partially mitigate credit risk (primarily construction risk) and facilitate bank credit at lower interest rates of 7.95 per cent per annum.
LGSCAS is aimed at boosting medical infrastructure in the country, specifically targeting underserved areas. The scheme does not cover units inside the municipal areas of New Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Ahmedabad and Pune.
The scheme provides a guarantee of 50 per cent for brownfield projects and 75 per cent for 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-19 wave placed enormous stress on the 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.