Incentive scheme for medical oxygen manufacturers, Karnataka

On July 15, 2021 the Karnataka state cabinet headed by Chief Minister BS Yediyurappa, approved a scheme for providing various incentives to the medical oxygen manufacturing companies/ units in the state. This incentive scheme was mainly planned in view of the shortage of oxygen in the state during the second wave of the covid-19 pandemic. Through this scheme the state government teds to encourage the medical oxygen manufacturing units to produce enough oxygen in the state to fulfill the requirement. The cabinet decided to provide 25% capital subsidy on fixed assets for companies to set up medical oxygen plants.  Apart from this, 100% exemption on electricity duty for three years after starting the production, tariff subsidy of Rs. 1000 per tonne of oxygen supplied to the government hospitals etc are some additional incentives provided.

Scheme Overview:

Scheme Objectives & Benefits:

• The main objective of the policy is to increase the production of medical oxygen in the state
• It tends to encourage the existing as well as new medical oxygen manufacturers in the state through providing attractive incentives
• Under this scheme, 25% capital subsidy on fixed assets subject to Rs. 10 crores minimum investment for companies to set up medical oxygen plants.
• This scheme will also provide 100% exemption on electricity duty for three years after starting the production and tariff subsidy of Rs. 1000 per tonne of oxygen supplied to the government hospitals
• 100% stamp duty exemption on land and loan documents registration and reimbursement of fees charges for conversion of land to set up oxygen plants will also be provided
• This scheme tends to ensure there is no further shortage of oxygen in the state in view of the anticipated third wave of the pandemic
• Medical oxygen supply will be increased at state level through this scheme
• It will strengthen the medical infrastructure in the state

Key Points:

• The Karnataka government approved Incentive scheme for medical oxygen manufacturers in the state on Thursday, July 15, 2021
• This decision was made by cabinet headed by Chief Minister BS Yediyurappa
• This scheme is mainly planned to encourage the medical oxygen manufacturing companies to produce more oxygen at a faster pace
• During the second wave of the pandemic, the state faced shortage of medical oxygen in hospitals
• Thus, the state government decided to ensure that no such problem arises in future in view of the anticipated third wave of the pandemic
• Under this scheme the oxygen manufacturing units will be given various incentives like 25% capital subsidy on fixed assets for companies to set up medical oxygen plants
• 100% exemption on electricity duty for three year after staring the production of oxygen
• Tariff subsidy of Rs. 1000 per tonne of oxygen supplied to the government hospitals, 100% stamp duty exemption on land and loan documents registration and reimbursement of fees charges will also be provided
• Currently Karnataka has 9 oxygen plants with manufacturing capacity of 815 MT and a storage capacity of 5,780 MT
• This scheme tends to encourage new entrepreneurs/ companies to come forward and start the production of oxygen with the help of attractive incentives
• It thereby aims to ensure that there is sufficient production and supply of medical oxygen in the state.