The Tamil Nadu government has come out with a fresh package of incentives to promote manufacturing medical equipment and drugs as the government steps up its fight against the outbreak of Coronavirus.

A special incentive package has been sanctioned for the manufacture of ventilators, PPE kits, N-95 masks, multi-para monitors, anti-malarial and anti-viral drugs in the State.

The incentives are applicable to both large industries and MSMEs. A government order for the above was issued on Thursday. “It’s a fresh offer of incentives to promote the manufacture of Covid-19 equipment and drugs in the State,” a senior official of the State government told BusinessLine .

The incentives include 30 per cent capital subsidy, subject to a ceiling of ₹20 crore, on the investment made in eligible fixed assets. The capital subsidy will be disbursed as equal annual instalments over five years. The investment made for manufacturing of essential equipment including modifications/upgradations of existing lines will be taken into account.

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Other incentives include 100 per cent stamp duty waiver, six per cent interest subvention for working capital loans availed from commercial banks or financial institutions for two quarters (till December 31, 2020), through TIIC (Tamil Nadu Industrial Investment Corporation Ltd).

In case of MSMEs, the aforesaid manufacturing will also be included under the category of ‘Thrust sector’ for the purposes of availing various applicable existing incentives.

Investors may commence manufacturing of these items and related activities without any prior approval mandated by State laws including DTCP. Necessary permissions may be obtained after the commencement of production.

SIPCOT and SIDCO will provide necessary lands/sheds on short-term or long-term lease on priority basis.

Priority will be given under NEEDS scheme for MSMEs who come forward to manufacture the Covid-19 medical equipment and drugs.

Minimum 50 per cent of the equipment and drugs produced under the package during three months (May-July 2020) will be purchased by Tamil Nadu Medical Services Corporation at negotiated rates.

The proposed packages will be implemented by SIPCOT for large industries and IC&DIC for MSMEs. Guidance Bureau of Tamil Nadu and MSME Trade and Investment Promotion Bureau will provide necessary guidance and facilitation including single window clearance for large industries and MSMEs, respectively.

The incentive package will apply to all manufactures who commence production of the mentioned equipment and drugs in the state before July 31, 2020. While the State government has been taking several proactive steps to combat Covid-19 pandemic, it is also considered very essential to augment the local manufacturing capacity of essential medical equipment and drugs with a special incentive package to promote manufacturing in the State, the government said.

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