The Interim Budget 2014 seems like a positive and welcome development. The manufacturing sector, in particular has benefitted, especially given the slump that the sector has been witnessing over the last several quarters. With duty cuts on auto and capital goods, and a general move to curb expenditure, there will be some relief for the middle class.
With regards to the Pharmaceuticals and Healthcare sector, spends have been kept at a constant, with a marginal change from last year. We welcome the liberalization of FDI, which will inevitably allow for larger investments to pour in. Despite volatility in global markets and slowdown in economic growth, pharmaceuticals as a sector has continued to clock in double digit growth in terms of earnings and India has emerged as the 3rd largest drug manufacturer globally. We do think that there is a need for the government to build an ecosystem that encourages innovation and R&D; we haven’t heard from the government on increase in weighted reduction or incentives for research& development or for that steps that would promote local manufacturing and exports from the Indian pharmaceutical Industry.
– Shamsher Gorawara, Spokesperson, Lupin
This is just a ‘Vote on Accounts’ for the interim period till a new Government takes over. For pharma, just like many other industries, there is nothing in it, excepting a R&D fund, which is good for the domestic players.
– Tapan J Ray, Independent Pharmaceutical Industry Analyst & Consultant
The budget is marginally positive for some sectors such as automobile and capital goods. Excise duty cuts for some sectors are welcome as it will reduce cost of major capital intensive projects such as power and transmission. Continuation of 10 per cent surcharge on those with taxable income in excess of Rs one crore is a disappointment for many pharma CEOs. One rank one pension for armed forces, albeit late ,is a positive step. Containing the fiscal deficit to 4.6 per cent of the GDP can be achieved only by financial jugglery. The finance minister has certainly kept international rating agencies away from downgrading Indian economy for some time. Our own Dalal street, however, is not impressed.
– Dr Ajit Dangi, President & CEO, Danssen Consulting
The union budget does not offer anything significant to the pharmaceutical and drug development industry. The need of the industry to provide incentives for innovation in pharma and drug development industry has also not been addressed. The long standing demand of the industry for creation of bio-clusters for pharma industry and API manufacturing finds no mention in the union budget.
– Renu Razdan, Vice Chairman, ACRO India
The healthcare challenges for the country are large and successive budgets have had a high degree of tokenism with the latest one being no different. It does not add up to much given the fact that two thirds of the population i.e. 750 million people have no access to healthcare.
Highlights of the health budget
Health and Family Welfare
10 years ago, the Central Government spent Rs 7,248 crore on health; this year, it will spend Rs 36,322 crore
Ministry of Health and Family Welfare has delivered new technologies to the people: the JE vaccine, a diagnostic test for Thalassaemia, and a Magnivisualizer for detection of cervical cancer
Skill development must rank alongside secondary education, university education, total sanitation and universal health care in the priorities of the Government
Ministry of Health and Family Welfare has requested that services provided by cord blood banks are also healthcare services and should be exempted from service tax. Propose to accept the request
The finance minister announced that all the ministries/ departments that run key flagship programmes of the UPA Government have been provided adequate funds. These include ministries namely, Minority Affairs, Tribal Affairs, Housing & Poverty Alleviation, Social Justice & Empowerment, Panchayat Raj, Drinking Water and Sanitation, Women & Child Development, Health & Family Welfare, Human Resource Development and Rural Development. Amongst these is also the Ministry of Drinking Water & Sanitation that has been allocated Rs 15,260 crore for FY 2014-15
Funding scientific research
The Income-tax Act allows deductions for expenditure on scientific research, but it is limited to direct funding. There is a proposal to set up a Research Funding Organisation that will fund research projects selected through a competitive process. Contributions to that organisation will be eligible for tax benefits. This will require legislative changes which can be introduced at the time of the regular Budget.
– Ranjit Shahani, Vice Chairman & Managing Director, Novartis India
“We are happy with the growth-oriented approach adopted by the Finance Minister by reducing excise duty rates. It may help in giving a boost to demand. Reduced government borrowings in 2014-15 will also bring fiscal discipline and put less pressure on domestic liquidity and rupee. The FM has put ample stress on the manufacturing sector and FDI, which will be beneficial for the pharma industry. The pharma sector will eagerly await the research funding body proposed by the FM to promote scientific research.”
– Pawan Chaudhary, Chairman & Managing Director, Venus Remedies