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RBI’s Covid Relief: How it benefits the Health Care Industry

Below mentioned are the highlights of benefits that the scheme offers to the healthcare industry.

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The growing number of cases has sparked a never-before-seen healthcare crisis in the country, resulting in a rise in the number of deaths. According to the recent report by World Health Organization, India was responsible for 46% of new Covid-19 cases worldwide last week, as well as one out of every four deaths. The current pandemic has put immense strain on India’s limited capability in Healthcare & Medical Device Manufacturing.

In order to help the medical sector with the liquidity, recently RBI has put a stimulus of more than 50,000 crores for the healthcare industry with tenors of up to three years. Under this, banks can provide easy loans to different health care entities. This initiative would help the MSMEs, Startups, Labs, Hospitals etc to ramp up & finance its production and essential supplies to meet the current demand.

Below mentioned are the highlights of benefits that the scheme offers to the healthcare industry.  

MSME’s & Startups

India is a land brimming with potential for medical device companies especially start-ups, it is the 4th largest medical device market in Asia after Japan, China & South Korea. According to IBEF, it is expected to reach $370 billion by 2022.

Considering the demand for medical devices and the tremendous population of our country, we shall localize the design and manufacture of most of the medical devices. Our stress should not only on building innovative devices but all devices for which India depends on imports. 

Previously, MSMEs and startups had difficulty obtaining credit from banks because banks preferred structured and large businesses. In 2020, India produced around USD 5,300 million worth of medical equipment locally. With the recent move, smaller micro-level players & med-tech startups engaged in manufacturing medical device can now participate in processes that were previously unaffordable to them, hence increasing the numbers, while bridging the gap between the reality of “Aatmanirbhar Bharat” & “Make in India.”

Hospitals & Diagnostic Facilities

With the recent surge in Covid cases in the country, there has been an increased number of footfalls in the hospitals & testing facilities, which is causing a shortage of ICU beds & testing kits in the country.

Considering the ongoing crisis and with the recent stimulus, hospitals & diagnostic facilities could now invest more in capital infrastructures & could also penetrate into Tier-II & Tier-III cities. If the initiative is implemented properly, it is to be noted that any kind of liquidity is good for healthcare industry. The demand and supply of the facilities will eventually be going to increase wherein Medical startups and corporates can be of big help as they can deliver all the products and services to the hospitals or clinics. 


The current pandemic has also highlighted our chronic dependence on Imports. Almost 80% of India’s market for medical devices is catered to by imports, in 2020 India imported approx.US $7,500 worth of equipment, while the exports accounted only for $1,520.

The medical devices designed and manufactured in developed countries for the people with per capita income of more than $50000, are sold in countries like India where the per capita income is barely $5000. The result is a very high cost of acquisition of routine medical devices for the hospitals and an even higher cost of healthcare services for people, making healthcare unaffordable for many. The current stimulus is believed to increase the exports, reducing the dependence on foreign markets, which in turn will make healthcare more affordable & make India “Aatmanirbhar”.


Every distressing situation is also an opportunity to introspect. Although the package is more apt for giving the healthcare sector a much-needed boost, the current deficiency in our healthcare system is an awakening call for the country leadership to build a long-term focused policy intervention and for industry and start-ups to rise to the occasion, and build long-term national capacity. After all, Indian doctors and engineers are the best in the world, India is the pioneer in the service industry. It suggests we have the intellectual capability to become “Aatmanirbhar” in medical device manufacturing.

With more clarity on active medical devices of importance by the government we can build more focused national capacity, and with the allocation of a particular amount to the qualified startups for research and development, regulatory approval, and setting up manufacturing facilities, will give enough cushion to manufacturing-based startups to spur research, design, and manufacturing in India. This must help India emerge as a global leader in Health Care across the globe, making the dream of “Make in India” come true.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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reserve bank of india healthcare

Sunil Singh

Co-founder & CEO at Univlabs

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