The program will allow companies to access funds for ramping up hospital capacity or medical supplies with the government acting as a guarantor, said the people, who asked not to be identified citing rules. The focus is likely to be on strengthening Covid-19 related health infrastructure in smaller towns, they said.
A finance ministry spokesperson could not be immediately reached for comment.
An explosive outbreak of the virus in India in recent months overwhelmed the nation’s deficient health care infrastructure, leading to a shortage of everything from hospital beds to oxygen supplies.
The government’s loan guarantees will complement the central bank’s efforts last month to boost credit for health care services and provide fresh lending to vaccine-makers.
The Reserve Bank of India (RBI) had then announced an on-tap liquidity window for banks worth Rs 50,000 crore to extend credit to health services and vaccine manufacturers until March 2022.
The government also last month separately announced including airlines and hospitals in a $41-billion emergency credit program to cushion them from the impact of the pandemic. That program guarantees loans worth Rs 2 crore to hospitals and clinics to set up on-site oxygen generation plants, with interest rates capped at 7.5%.
There is also room for expanding the overall size of that program, the people said.