The pharmaceutical industry wants the forthcoming federal budget to grant incentives to boost exports and extend the scope of tax breaks given for research and development work.

  • Tax breaks of up to 150 percent of a firm's research expense by five years to 2012 should be extended by another five years to 2017
  • Tax breaks should also be given to drug firms involved solely in R&D and also  cover all expenses incidental to basic research, including clinical trials, done in India or abroad.
  • The industry is hoping for some exemptions for export activities as tax breaks for export-oriented units, which were set up to encourage exports, are set to expire in 2009.
  • The industry is also seeking reduction of excise duties on drugs to 8 percent from 16 percent now.
  • The weighted deduction for R&D under Section 35 (2AB) should be raised from 150% to at least 200%. It should be extended to all expenditure incidental to basic research carried out at any R&D unit, including clinical trials and bio-equivalence studies. This should be available to expenditure on obtaining approvals and filing patent applications also.
  • A dire need for provision of common infrastructure facilities for waste treatment and water supply to industry units by the government in regards to a uniform environmental law – 10% of its revenues goes towards investments on waste management.
  • SEZ benefits should be provided to all exporting units to make exports more competitive.

*The union budget will be presented at the end of February.