HP Govt Rolls Out INR 350 Cr Medical Device Park Project Bypassing Central Aid

The state government plans to finance the medical device park with a loan from SIDBI under the cluster development scheme.

The Himachal Pradesh state government has announced plans of building a medical device park independently in Nalagarh, Solan district, using its own resources for a whopping sum of INR 350 Cr.

Interestingly, the state has returned the INR 30 Cr received from the central government for this project, which will be built on 265 acres.

A state government release explained that accepting central funds would have necessitated providing significant incentives to industrialists. These incentives included land at INR 1 per sq m, electricity at INR 3 per unit, free water, maintenance, and warehouse facilities for ten years.

Most of the equipment produced in the park would be sold outside the state, causing a direct loss to the state treasury due to the non-collection of State Goods and Services Tax (SGST).

The state government anticipates benefiting by INR 500 Cr over the next 5-7 years from the sale of land and other resources by undertaking this project independently. According to its industrial policy, the government will offer incentives to industries in the medical device park.

Sukhvinder Singh Sukhu, CM, Himachal Pradesh, elaborating on the rationale behind returning the central funding, said, "The people of Himachal Pradesh have a right over these resources, and the state government will take every step to protect the interests of the people. By returning the central government funds, we avoid mandatory incentives that would burden the state exchequer and result in revenue loss. The state has already released Rs 74.95 crore for this project and prioritizes the construction of the medical device park."

Self-Funding Initiatives

Previously, the state government decided against seeking private agency assistance for the Bulk Drug Park in Haroli, Una district, opting to allocate INR 1,000 Cr from its own resources for the project.

The state government further plans to take a loan from the Small Industries Development Bank of India (SIDBI) under the cluster development scheme to finance the medical device park in Nalagarh.

Reportedly, the project will be restructured to allocate 25% of the land for medical device industries and 75% for other strategic industries, ensuring comprehensive industrial development in the region.

The industrial park aims to become an industrial hub in Himachal Pradesh, providing a steady income source for the state government. It aims for economic development and improved infrastructure in the coming years.