‘’A special focus on R&D funding is required’’

It is critical for the country to improve its macro economic conditions in order to have a healthy industrial growth in near term. This means immediate steps are expected to curtail the twin deficits, supply side of inflation and improvement of investment climate.

We expect overall government focus on health care to improve and would welcome policies incentivising healthcare infrastructure in the country. Budget should give suitable directions to lift confusions over foreign direct investments, national drug pricing policies and essential drugs procurement mechanism. In the past decade or so, exports has contributed a lot into India’s growth story and to this cause export linked deductions have helped. It will be a good idea to reinvigorate deductions like section 80HHC. In the previous budget, time window for weighted average deduction was enhanced by another five years. However, the weighted average deduction excludes costs incurred outside the approved R&D facility. This leaves a significant costs of the pharma companies outside the scope of the deduction. Thus, clinical trials and regulatory costs undertaken outside approved R&D facility or overseas should be covered. Besides, it will be a good idea to exempt R&D income from the tax net. A special focus on R&D funding is also required. On excise front, abatement of 35 per cent is too low given the fact that pharma industry has to shell out heavy costs in distributing and marketing through channel partners. The inverted duty structure between API and formulations is also a long pending demand of the sector.

– Pawan Chaudhary, Chairman & Managing Director, Venus Remedies