Andhra Pradesh unveils new medical oxygen policy

Entrepreneurs setting up new plants are offered up to 30% subsidy on capital expenditure and ₹2 per unit discount on power tariff.  

To meet the rising demand for medical oxygen due to COVID in the State, Chief Minister Y.S. Jagan Mohan Reddy on Tuesday unveiled the “AP Industrial Gases and Medical Oxygen Manufacturing Policy 2021-22”, aimed at increasing the current manufacturing capacity of 360 metric tonnes to 700 metric tonnes. The target is to set up at least 50 PSA oxygen generation plants.

The policy facilitates the revival of sick oxygen generator plants, capacity enhancement of existing plants and establishment of new plants by entrepreneurs by offering up to 30% subsidy on capital expenditure and ₹2 per unit discount on power tariff. According to a press release, the State’s oxygen generation capacity was 364 MTs currently and the rest of the demand was being met from the allocation by the Centre.

The State decided to rapidly augment the capacity of captive (within hospitals) and non-captive plants so that reliability and self-sufficiency were achieved.

The release stated that the government had already received indent from companies such as Nova Air (Sri City), Air Liquid (Kadapa), Praxair (Chittoor), and Inox Air Products (Vijayawada/Guntur) which planned to enhance oxygen production capabilities in the State.

Further, six sick pressure swing adsorption (PSA) units had been identified and refurbished for production. The release said there was a lot of interest from entrepreneurs to set up small/medium scale oxygen (PSA) plants which could be installed in three to six months.

The State government was in talks with suppliers across the globe to import zeolite molecular sieve, a key crystalline porous material used in oxygen PSA plants.


Further, the policy aimed at distributing manufacturing across the State in three zones geographically and all technologies such as PSA, Liquid Oxygen (Lox), Helium Mixed Oxygen (Heliox) will be supported.

For the sick PSA units, the policy assures 20% subsidy on capital up to ₹20 lakh per MT and ₹2 discount on power tariff up to ₹7 lakh a year for three years.

For the new captive PSA units, 30% capital subsidy up to ₹30 lakh and ₹2 discount on power tariff up to ₹7 lakh a year for two years would be provided.

Similarly, for the new non-captive units using Lox and Heliox technology 20% capital subsidy (up to ₹20 lakh per MT) and 25% capital subsidy (up to ₹25 lakh per MT) would be provided respectively. For both Lox and Heliox plants power tariff subsidy of ₹2 (up to ₹7 lakh) for the first year will be given. For the second year, it will be ₹1.5 and for three to five years it will be ₹1 discount per unit.

The policy was prepared by the Department of Industries in consultation with the Department of Health, Medical and Family Welfare.

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Printable version | Aug 4, 2021 2:44:06 PM |

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