IDMA, BDMA welcome Union BudgetThe industry has by and large hailed the Union budget for the financial year 2009-10 presented by finance minister Pranab Mukherjee.

Welcoming the budget, IDMA president NR Munjal said that the budget is very pragmatic and progressive. The increase in allocation for National Rural Health Mission (NRHM) from Rs 2057 crore to Rs 12070 crore is a welcome step. The customs duty cut from 10 per cent to 5 per cent on 10 life saving drugs & vaccine and abolishing of FBT is also a positive step. Extension of sun-set clauses in respect of export profits under section 10A and 10B by one year is also welcome, he said.

Describing the budget as insignificant, BDMA president M Narayana Reddy said that the missing feature of the budget is that it entirely overlooked the importance of bulk industry and its needs. The industry is in fact looking for a stimulus package to face the sever competition put up by China. The Government, while appreciating the necessity of making the industry clean and green, it has not offered any encouragement to the industry through this budget.
The Govt. should have exempted custom duty entirely on the import of effluent treatment machinery/equipment, which would definitely help achieving zero discharge pollution, Reddy said.

In her reaction to the budget, senior vice president, ASSOCHAM, Dr Swati Piramal said that for the pharma industry, introduction of GST on time is a positive step and will reduce transaction costs significantly. We hope that next year will see increased emphasis on R&D.

Commenting on the budget, Biocon Limited CMD Kiran Mazumdar-Shaw said that action on the healthcare front is encouraging with increase in allocation under NRHM and the government proposing to bring all BPL families under the national health insurance scheme. However, more creative solutions are required to heal India's creaking public healthcare system. The government must focus on reforming the system through public-private partnership, roping in micro-credit institutions to deliver health insurance, and making affordable medicines available.

Pranab Mukherjee has taken the last point into consideration in reducing Customs Duty on specified life-saving drugs/vaccines – such as for breast cancer, hepatitis-B and rheumatic arthritis – and their bulk drugs and on some heart devices. He has also made them totally exempt from excise duty and countervailing duty. This should also help the biotech industry, Shaw said.

D Sucheth Rao, CEO, Neuland Laboratories Ltd said that the pharma industry sees some benefits with the decision of the finance minister to extend of the R&D tax benefits. This will help Indian pharma companies further focus their R&D. The industry would have greatly benefited if the finance minister had announced a ten year extension of tax benefits for standalone R&D entities and offered incentives to pharma companies for research and annual development in the country.

To promote clinical research, research and development, the government should have taken steps to reduce import duty to nil on inputs for research and development activities. Also government should have introduced tax exemptions on the foreign currency payments to overseas consultants for research and development units.

The decision by the government to reduce to the customs duty on life saving drugs as well as some of the vaccine and cancer products will greatly benefits the patients as this will make the treatment cost effective. However it would have helped if the government had announced a total excise exemption on 354 drugs specified in the national list of essential medicines, Rao added.

Sanjay Nagrath, vice president (finance), Intas Biopharmaceuticals Limited, said that the scope of provisions relating to weighted deduction of 150 per cent on expenditure incurred on in-house R&D to all manufacturing businesses being extended is a welcome step. Legitimate R&D expenses, including filing patents to protect IP, would need to be covered under the weighted deduction scheme.

It is good that the Union government has taken a positive look towards health probably after so many years. All of us should collectively strive to bring down the cost of the treatment. One of the focus areas should be to make medical equipments cheaper and make the whole system accountable by introducing necessary software, stated Dr N K Venkataramana, vice-chairman, BGS Global Hospitals.

The budget failed to provide the much-sought impetus to the pharmaceutical industry. When R&D and Innovation are the buzzwords in the industry, and the R&D spending as a proportion of revenue is continuously increasing year on year, the finance bill remained silent on incentives for R&D investment. The increased allocation for NRHM over and above the outlay in interim budget will expand the access of healthcare facility. This 'Consumption-oriented' budget if implemented means more money in the hands of people and that's going to increase the private healthcare expenditure which includes expenses for medicines. That can be a boost for the pharma industry, Frost & Sullivan in its comment said.

No incentives have been provided for R&D or the Pharma and Biotech sector. I would have been happier had he put in incentives which would have been allocated for new technology development or new drug development. Also, direct investments into the Biotech would have been highly desirable, Actis Biologics Pvt Ltd chairman & CEO Sanjeev Saxena commented.

K Chandran, director, Wanbury Ltd said the reduction of customs duty by half on life-saving drugs will enable the prices of these valuable medicines to significantly come down. Increase in the allotment of NRHM funding and rural insurance will benefit the rural poor.

Welcoming the budget, Astellas Pharma India Private Limited managing director Teruo Yasufuku said the budget is positive especially for overall development of the rural healthcare. An increased allocation of Rs 2,057 crore over and above Rs. 12,070 crore to the NRHM will have a positive impact on the national healthcare. However, we feel that the budget should have also focused on providing better infrastructure and raising awareness concerning organ transplant in India to ensure a greater chance of life for people waiting for transplants, he said.