Positive Budget for healthcare, hospitals and pharma companies. The weighted deduction of 125% to R&D will add back significantly to profits. Excise duties coming down from 16% to 8% for all pharmaceutical products is very positive for all patients and consumers. Custom duties for lifesaving drugs coming down, excise duties coming down to nil for lifesaving drugs; for HIV AIDS products excise duties coming down is a very strong message for the industry, for the consumers.
Healthcare allocation to be raised by 15%
The healthcare sector will contribute around 7-8% by the next five years, if considerable importance was given to the sector. He had hiked the allocation to health sector by 21.9% to Rs 15,291crore.
Duty reduced on life saving drugs
General Centvat on all goods to be reduced from 16 percent to 14 percent. Excise duty reduced from 16 percent to eight percent on all pharmaceutical goods manufacture.
More allocation for polio and AIDS
Totally exempt from excise duty the anti AIDS drug, Atazanavir, as well as bulk drugs for its manufacture. The drive to eradicate polio continues with a revised strategy and a focus on the high risk districts in Uttar Pradesh and Bihar. I propose to provide Rs.1,042 crore in 2008-09 for this purpose.
Anti-Aids drug exempted from excise duty
The National Aids Control Programme will be provided Rs.993 crore. Studies have shown that the prevalence rate of HIV/AIDS has come down from 0.9 per cent to 0.36 percent, which is a matter of some satisfaction.
Five year tax holiday for setting up hospitals in tier II and tier III regions for providing healthcare in rural areas from April 1, 2008.
A five year tax holiday has been announced for setting up Hospitals anywhere in India, specially in tier-2 and tier-3 towns in order to serve the rural interland. Certain specified urban agglomerations will not be covered. This window will be open for the period April 1,2008 to March 31, 2013, during which the hospital must commence operations. For the purpose a new sub-section 11 C in Section 80-IB will be inserted
Rs 12050 cr for strengthening rural health services :
Finance Minister P Chidambaram has proposed to allocate Rs16,534 crore to the health sector, which contributes to 6.05% of GDP, for FY09. He has also hiked the allocation to the National Rural Health Mission by 15% and has announced a health cover of Rs 30,000 for every worker in the BPL category
Micro, Small and Medium Enterprises
Micro, small and medium enterprises will continue to receive support from the Government. The budget proposes to create a risk capital fund in the Small Industries and Development Bank of India (SIDBI). As on January 31, 2008, the Credit Guarantee Trust with SIDBI had extended guarantees to 89,129 units for an amount of Rs.2,479 crore. SIDBI will reduce the guarantee fee from 1.5 per cent to 1 per cent and the annual service fee from 0.75 per cent to 0.5 per cent for loans up to Rs.5 lakh.
Research & Development
Companies engaged in certain businesses are allowed a weighted deduction of 150 percent on any expenditure on in-house scientific research. The Budget proposes to add the business of production of seeds and manufacture of agricultural implements to this list.
Budget Reactions from Pharma Industry
* This is a very positive Budget for healthcare, hospitals and pharma companies.
– Malvinder Singh , CEO , Ranbaxy Laboratories
* A well-balanced budget with good sops for the Pharma industry.
–Alok Saxena , Director (International) , Elder Pharmaceuticals