India plans $6.8 bn program to boost health infrastructure

Bloomberg | Updated on June 16, 2021

Funding for healthcare facilities will be provided to companies

India is considering offering as much as 500 billion rupees ($6.8 billion) of credit incentives to boost healthcare infrastructure in the nation hit by the coronavirus pandemic, according to people familiar with the matter.

The program will allow companies to access funds for ramping up hospital capacity or medical supplies with the government acting as a guarantor, said the people, who asked not to be identified citing rules. The focus is likely to be on strengthening Covid-19 related health infrastructure in smaller towns, they said.

An explosive outbreak of the virus in India in recent months overwhelmed the nation’s deficient health care infrastructure, leading to a shortage of everything from hospital beds to oxygen supplies. The government’s loan guarantees will complement the central bank’s efforts last month to boost credit for healthcare services and provide fresh lending to vaccine-makers.

RBI had then announced an on-tap liquidity window for banks worth 500 billion rupees to extend credit to health services and vaccine manufacturers until March 2022.

The government also last month separately announced including airlines and hospitals in a $41-billion emergency credit program to cushion them from the impact of the pandemic. That program guarantees loans worth 20 million rupees to hospitals and clinics to set up on-site oxygen generation plants, with interest rates capped at 7.5%.

There is also room for expanding the overall size of that program, the people said.

Published on June 16, 2021

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