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Karnataka govt announces scheme to incentivise medical oxygen plants after facing shortage during Covid second wave

Minister Basavaraj Bommai announced the scheme which will give a 25 per cent capital subsidy on the value of fixed assets, subject to Rs 10 crore minimum investment to set up medical oxygen plants.

Prompted by the oxygen shortage during the second wave of Covid-19, the Karnataka government on Thursday approved a scheme to provide special incentives for medical oxygen manufacturing units in the state.

After the cabinet meeting held in Vidhana Soudha in Bengaluru, Law and Parliamentary Affairs Minister Basavaraj Bommai announced the scheme which will give a 25 per cent capital subsidy on the value of fixed assets, subject to Rs 10 crore minimum investment to set up medical oxygen plants. There will be a 100 per cent exemption from electricity duty for three years after commencement of commercial production, additional power tariff subsidy of Rs 1,000 per metric tonne on supply to the government.

“There will also be 100 per cent stamp duty exemption and reimbursement from loan and land documents, concessional registration charges, 100 per cent reimbursement of land conversion fees,” The minister said.

At present, Karnataka has only nine oxygen plants with a manufacturing capacity of 815 MT and a storage capacity of 5,780 MT. “To increase the capacity, if any entrepreneurs come forward, we will give them incentives,” he said.

During the second wave of the Covid-19 pandemic in April-May, the state needed 830 MT of oxygen per day of which Bengaluru city alone required 285 MT.

When cases had peaked, Karnataka was allocated 1,200 MT of oxygen supply, following the intervention of the high court. However, it managed to get only around 850 MT on a daily basis from suppliers within the state. Before the intervention of the High Court, 765 MT of oxygen was allotted to hospitals by the state government, with 252 MT reserved for Bengaluru.

Prior to the increase in the allocation, hospitals in the Chamarajnagar, Kalaburagi and Kolar districts in Karnataka saw multiple deaths due to an alleged shortage of oxygen between April 26 and May 7.

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