Uttar Pradesh Private Medical College Scheme, 2022: Models, incentives and eligibility

SCHEME AT A GLANCE

 

Item	Position
Official description	Scheme for Government Support to Private Investment in Development of Medical Colleges in Unserved Districts
Common title	Private Medical College (Unserved Districts) Scheme, 2022
Administrative department	Medical Education Department, Uttar Pradesh
Implementing authority	Directorate General of Medical Education and Training
Geographic coverage	16 districts identified as unserved when the scheme was formulated
Development structure	Public-private partnership and state-supported private investment
Minimum medical-college capacity	100 undergraduate medical seats
Main development routes	Three state-support modes and one Union government viability-gap-funding model
Principal incentives	Interest subsidy, per-seat assistance, land conversion exemption, equipment subsidy, nominal land or hospital lease and applicable stamp-duty support
Concession period under relevant modes	33 years, with specified extension or handback conditions
Current status	The scheme remains part of the state’s programme to establish medical colleges in 16 unserved districts

 

 This is not a general subsidy for opening a private hospital or nursing college. It is specifically designed for integrated medical college and teaching hospital projects in districts selected by the state. The medical college must comply with the National Medical Commission’s regulations and the applicable state laws.

  

What is the Private Medical College Scheme?

The scheme seeks to attract private capital and expertise for developing medical colleges and associated teaching hospitals in districts that did not have such institutions.

 

A medical college requires more than classrooms and academic buildings. It must have access to a functioning teaching hospital, adequate clinical material, laboratories, hostels, faculty, equipment, library facilities and other infrastructure prescribed by the National Medical Commission.

 

The scheme therefore combines private investment with different forms of government support. Depending on the selected model, the private entity may:

• Bring its own hospital and land;
• Bring an operational hospital while the government provides land;
• Bring land while the government provides an existing district hospital;
• Develop the project using both government land and a district hospital under a viability-gap-funding arrangement.

All supported colleges must be designed for at least 100 Bachelor of Medicine and Bachelor of Surgery seats. The number of seats ultimately permitted depends on approval from the National Medical Commission rather than the state scheme alone.

 

Why was the scheme introduced?

 

The intended objectives include:

• Establishing a medical college in every district;
• Increasing undergraduate medical seats;
• Improving access to specialist healthcare;
• Upgrading hospital infrastructure in underserved districts;
• Attracting private capital into medical education;
• Using existing district hospitals more efficiently;
• Reducing the need for patients and students to travel to larger cities;
• Combining government assets with private management and investment.

 

The scheme originally identified 16 unserved districts: Baghpat, Mainpuri, Sant Kabir Nagar, Ballia, Rampur, Bhadohi, Kasganj, Maharajganj, Shamli, Chitrakoot, Mahoba, Hamirpur, Mau, Shravasti, Sambhal and Hathras. The status of an individual district may subsequently have changed because of separate government projects or approvals. Applicants must therefore use the current tender or request-for-proposal document rather than relying only on the original list.

 

What development models are available?

The scheme offers two broad models. The first uses state fiscal and non-fiscal support and has three sub-modes. The second uses the Union government’s viability-gap-funding framework.

 

Mode A: Private hospital and private land

Under Mode A, the private entity provides:

• An operational private hospital;
• Sufficient private land;
• Medical-college buildings and infrastructure;
• Equipment, faculty and other regulatory requirements.

 

The existing hospital must be augmented to meet the standards required for a medical college with at least 100 undergraduate seats.

 

The private entity operates both the college and hospital. The government does not provide land or an existing district hospital but offers the fiscal and non-fiscal incentives available under the scheme.

 

Mode A receives the highest priority during proposal selection because it requires the least direct government asset support.

 

Mode B: Private hospital and government land

Under Mode B, the private entity brings an operational hospital, while the state provides land for constructing the medical college.

 

The land may be provided at a nominal annual lease rent of Re 1, subject to performance and the concession conditions.

 

The private entity is responsible for developing and operating the medical college and hospital for 33 years. The official policy summary states that the arrangement may be extended for another 33 years automatically, subject to performance and the applicable agreement.

 

At the end of the lease period, the land and medical-college infrastructure are to be returned to the government. The privately owned hospital is not required to be transferred merely because the land lease ends.

 

Mode C: Government district hospital and private land

Under Mode C, the government provides an existing district hospital on an “as is where is” basis, while the private entity provides land for the medical college.

 

The private partner must:

• Upgrade the district hospital to meet teaching-hospital standards;
• Develop the medical college;
• Operate the college and hospital;
• Provide 500 square metres of built-up space within the hospital for public-health functions performed by the Directorate General of Health Services or the Health Department;
• Return the upgraded district hospital at the end of the 33-year concession period.

The district hospital is provided at a nominal lease rent of Re 1 a year. Existing government personnel may be redeployed over two years, with the scheme summary referring to 50 per cent redeployment at the end of each year.

 

The private operator may charge patients according to the applicable policy and concession conditions rather than setting unrestricted prices.

 

Model 2: Union government viability-gap funding

The second model combines:

• A government district hospital;
• Government-provided land;
• Private development and operation;
• Viability-gap funding under the Government of India framework administered by the Department of Economic Affairs.

Viability-gap funding is financial support for an infrastructure project that is socially desirable but may not generate enough commercial return to attract private investment without government assistance.

 

Projects under this model must comply with the Union government’s viability-gap-funding guidelines, competitive procurement requirements and project-specific concession documents. State policy incentives cannot be assumed to apply automatically where the central viability-gap-funding structure already provides support for the same expenditure.

 

How are proposals prioritised?

The scheme gives priority in the following order:

 

The ranking reflects the extent of government support required. A Mode A proposal uses privately arranged land and a private hospital, while Mode B requires government land and Mode C requires access to a district hospital.

 

Priority does not mean that the first proposal under a higher mode will automatically be selected. The applicant must still satisfy technical, financial, legal and medical-education requirements.

 

A private entity may apply for one or more districts, subject to the conditions in the relevant expression of interest, tender or request for proposal.

  

Who can apply?

 

The scheme is intended for private-sector entities capable of developing and operating a medical college and teaching hospital.

 

Depending on the procurement document, eligible applicants may include:

• Companies;
• Registered trusts;
• Societies;
• Educational institutions;
• Hospital operators;
• Consortia of eligible private organisations;
• Other legal entities permitted under National Medical Commission regulations.

 

The applicant must demonstrate adequate:

• Net worth and financial capacity;
• Hospital-management experience;
• Medical-education or healthcare experience;
• Access to land where the selected mode requires private land;
• Ability to arrange project finance;
• Capacity to recruit faculty and staff;
• Experience in constructing and operating large institutional projects;
• Compliance with applicable tax, corporate and legal requirements.

 

The National Medical Commission permits eligible consortia, subject to its regulations. State selection and financial support do not replace the commission’s permission to establish a medical college.

  

What interest subsidy is available?

 

All three state-support modes provide an interest subsidy of 5 per cent on eligible capital expenditure incurred for developing or upgrading the project.

 

The assistance is available for five years and is capped at:

• Rs 1 crore a year;
• A maximum potential benefit of Rs 5 crore over five years.

 

 The subsidy applies to eligible interest on approved capital borrowing. It does not reimburse the principal loan or provide an upfront grant equal to 5 per cent of total project cost.

 

The private entity must generally demonstrate:

• Sanction of an eligible term loan;
• Expenditure on the approved medical college or hospital;
• Interest actually paid;
• Regular servicing of the loan;
• Compliance with project milestones;
• Commencement or continuation of approved operations.

 

 Penal interest arising from default should not be assumed to qualify. The exact eligible borrowing and disbursement schedule must be taken from the project agreement and sanction order.

   

What per-seat assistance is available?

The state provides assistance linked to the first two Bachelor of Medicine and Bachelor of Surgery batches.

 

The rates differ by development mode: 

 

Although the support is described as assistance for the first two batches, the maximum per-student ceilings indicate that payment may be linked to the approved course period and continued compliance.

 

For a 100-seat college, the theoretical annual assistance at the headline rate would be:

• Rs 5 crore under Mode A;
• Rs 2 crore under Mode B;
• Rs 3 crore under Mode C.

 

These amounts should not be treated as guaranteed payments. Assistance depends on actual admissions, recognised seats, continuation of National Medical Commission approval, academic operations and verification under the agreement.

  

What land-related support is available?

Nominal government land lease

 

Under Mode B, government land may be allotted at a nominal annual lease rent of Re 1.

 

The land remains a government asset. The private partner receives a contractual right to use it for the approved medical college during the concession period.

 

The land cannot be diverted to unrelated commercial, residential or speculative use. Breach of development obligations may lead to termination, recovery or resumption under the concession agreement.

  

Land-conversion exemption

 

The scheme provides a 100 per cent exemption from land-conversion charges under Modes A, B and C.

 

This benefit applies to the eligible land required for the approved medical college project. It does not remove the need to obtain formal land-use approval or comply with the applicable master plan, revenue laws and building regulations.

 

The competent authority must confirm the exemption before the applicant treats the amount as a financial saving.

  

Stamp-duty support

 

Stamp-duty treatment is linked to the applicable Uttar Pradesh Industrial Investment and Employment Promotion Policy.

 

The actual exemption or reimbursement depends on:

• The prevailing industrial policy;
• Project location;
• Nature of the land transaction;
• Whether the land is purchased or leased;
• The eligibility certificate;
• The operative stamp-duty government order.
• Applicants should not assume a universal full exemption without obtaining project-specific confirmation.

 

What equipment subsidy is available?

 

Mode C projects may receive an equipment subsidy equal to 20 per cent of eligible equipment expenditure, capped at Rs 10 crore a year.

 

The support recognises that the private partner must upgrade an existing district hospital and equip it to meet the requirements of a teaching institution.

 

Eligible expenditure may include approved:

• Diagnostic equipment;
• Laboratory equipment;
• Teaching-hospital systems;
• Operation-theatre equipment;
• Intensive-care equipment;
• Imaging and clinical systems;

 

Other medical equipment required under National Medical Commission norms.

 

Land, routine consumables, maintenance contracts and equipment unrelated to the approved project should not be assumed to qualify.

 

The subsidy is listed only for Mode C in the official policy summary. Mode A and Mode B applicants should not include it in their financial model unless a later project-specific document expressly provides otherwise.

  

What outpatient support is available?

 

Mode C projects may receive reimbursement linked to outpatient consultation and related diagnostic services.

 

The prescribed amount is:

• Rs 100 per qualifying patient;
• Annual escalation of 3 per cent;
• Maximum reimbursement of Rs 2 crore a year.

 

The benefit is intended to support continued access to outpatient care after a district hospital is transferred to private operation under the concession.

 

The operator must maintain verifiable patient and service records. The reimbursement should not be interpreted as permission to claim Rs 100 for every hospital visit irrespective of eligibility, duplication or the services provided.

 

 The detailed concession agreement should specify:

• Eligible patients;
• Covered consultations and diagnostics;
• Reporting requirements;
• Audit and verification;
• Treatment of government health-scheme beneficiaries;
• Permitted patient charges. 

 

Which approvals are required?

 

State approval under the scheme is only one stage of the project.

 

The private entity may need approvals relating to:

• Establishment of the medical college from the National Medical Commission;
• Affiliation to an eligible university;
• Essentiality certification and state consent;
• Building plans and occupancy;
• Fire safety;
• Pollution-control consent;
• Biomedical-waste management;
• Blood bank, pharmacy and diagnostic services;
• Atomic Energy Regulatory Board permission for relevant imaging equipment;
• Hospital registration;
• Water, electricity and sewage systems;
• Faculty, resident-doctor and staff requirements.

 

The scheme does not allow the state government to waive standards prescribed under the National Medical Commission Act, 2019, or other central healthcare laws.

  

How can a private entity participate?

 

Projects are allocated through an expression of interest, tender or public-private partnership procurement process issued by the Directorate General of Medical Education and Training.

 

The broad process involves:

• Reviewing the district-specific procurement document;
• Selecting Mode A, B or C, or the viability-gap-funding model;
• Demonstrating the required hospital and land arrangements;
• Submitting technical and financial qualifications;
• Providing the project concept and financing plan;
• Undergoing evaluation by the state;
• Receiving selection or preferred-bidder status;
• Executing the concession or support agreement;
• Achieving financial closure;
• Constructing or upgrading the hospital and college;
• Applying to the National Medical Commission;
• Commencing admissions only after regulatory approval;
• Submitting claims against verified milestones.

 

The Directorate General maintains separate pages for public-private partnership projects, tenders, news and archived procurement documents.

 

Implementation and current status

 

The Uttar Pradesh Budget 2026–27 states that the state currently has 81 medical colleges, including 45 operated by the government and 36 by the private sector. It reports that 60 districts are covered by medical-college facilities and that colleges are to be established in 16 unserved districts through the public-private partnership system.

 

The same budget proposes Rs 1,023 crore for the establishment and operation of 14 new medical colleges. That allocation should not automatically be treated as funding solely for the private-college scheme because it may cover separate government medical-college projects and operating expenditure.

 

The Directorate General’s public-private partnership page lists projects for development of medical colleges in six districts with viability-gap funding from the Government of India. It also maintains tender and archive records for projects in the wider group of unserved districts.

 

The official sources reviewed did not provide a consolidated table showing:

• Private proposals received under each mode;
• Concession agreements signed;
• Land and district hospitals transferred;
• Financial closure achieved;
• Interest subsidy sanctioned;
• Per-seat assistance disbursed;
• Colleges receiving National Medical Commission approval;
• Colleges beginning admissions under the scheme;
• Projects cancelled or delayed.

Announcements, tenders and selected bidders should therefore be distinguished from completed colleges and operational medical seats.

  

Key challenges and practical considerations

• Regulatory approval: A completed building cannot admit students without National Medical Commission permission.

• Large capital requirement: Medical colleges and teaching hospitals require substantial long-term investment.

• Faculty availability: Recruiting the required number of qualified teachers and resident doctors can be difficult in smaller districts.

• Patient volumes: A teaching hospital must maintain adequate clinical material across departments.

• Affordability: Private operation must be balanced with accessible healthcare and the concession’s patient-charge provisions.

• Asset handback: Modes involving government land or hospitals require long-term maintenance and eventual transfer. 
• Multiple funding streams: State incentives, central viability-gap funding and other subsidies must not reimburse the same cost twice.

  

FAQs

What is the minimum medical-college size?

Each supported project must provide at least 100 undergraduate medical seats, subject to National Medical Commission approval.

 

Is government land available?

Yes. Under Mode B, government land may be leased at Re 1 a year, subject to the concession conditions.

 

Can an existing district hospital be used?

Yes. Under Mode C, an existing district hospital may be provided at a nominal lease rent for upgrading and operation as a teaching hospital.

 

What interest subsidy is available?

The scheme provides a 5 per cent interest subsidy for five years, capped at Rs 1 crore a year.

 

Is there direct assistance for medical seats?

Yes. Assistance for the first two undergraduate batches varies from Rs 2 lakh to Rs 5 lakh per seat per year, depending on the selected mode.

 

Which department administers the scheme?

The Medical Education Department and Directorate General of Medical Education and Training administer the framework.

 

Conclusion

The Private Medical College Scheme, 2022 is a public-private partnership framework for extending medical education and teaching-hospital services to districts that lacked a medical college.

 

Its three state-supported modes vary according to whether the private party or government provides the hospital and land. Assistance includes interest subsidy, per-seat support, land-conversion relief and, under Mode C, equipment and outpatient-service support. A separate model uses Union government viability-gap funding.

 

The scheme’s success must be measured through colleges receiving National Medical Commission approval, students actually admitted, teaching hospitals becoming operational and affordable healthcare being sustained—not merely through tenders, selected districts or proposed investment.

 

Sources

• Scheme for Government Support to Private Investment in Development of Medical Colleges in Unserved Districts, Medical Education Department, Government of Uttar Pradesh.
• Private Medical College (Unserved Districts) Scheme, 2022, Invest UP, Government of Uttar Pradesh.
• Public-Private Partnership Projects, Directorate General of Medical Education and Training, Uttar Pradesh.
• Tenders and archived documents for medical colleges in unserved districts, Directorate General of Medical Education and Training, Uttar Pradesh.
• Uttar Pradesh Budget 2026–27, Finance Department and Information and Public Relations Department, Government of Uttar Pradesh; February 2026.