Mumbai: The pharma sector representatives said the Union Budget has failed to specifically address imminent challenges directly affecting the key industry, but hailed certain proposals of Finance Minister Arun Jaitley.
The life sciences sector had great expectations from the Budget not only from a fiscal incentive perspective but also from a regulatory angle. Expectations were based on the Government's vision of making India one of the top three pharmaceutical markets by 2020, according to experts.
They, however, welcomed certain Budget proposals. In 2017, too, no specific impetus was given to the sector. The move to eradicate certain NCDs, the proposal to set up two new AIIMS, additional post-graduate medical seats, proposed amendments in the Drugs and Cosmetics Rules and new rules for medical devices are welcome.
However, the Budget has not specifically addressed imminent challenges directly affecting the sector, KPMG India National Head-Life Sciences Practice Utkarsh Palnitkar said.
In order to stay competitive in the overseas market and given the uncertain global climate, it was expected that specific impetus or incentives would be given to innovation in the form of weighted deduction on R&D, incentives for patents, exemptions of certain duties and taxes. These demands remained largely un-addressed, giving no specific reason to cheer for the sector as a whole in 2017-18, Palnitkar said.
Glenn Saldanha, Chairman and Managing Director, Glenmark Pharmaceuticals said, overall, the Union Budget is a step in the right direction. Lowering tax on MSMEs is a welcome step that would provide a much-needed fillip by creation of jobs and putting more money in their pockets in all sectors, including pharmaceuticals.
The Government has shown its clear intent towards fast-tracking inflow of FDI, and the scrapping of FIPB is a notable step that would go a long way in supporting the objective of ease of doing business, Saldanha said.
Additionally, the Government's impetus to reduce the borrowing cost and increase access to credit will surely help businesses to grow, he said.
"We see the biggest-ever allocation to the infra sector which would benefit all sectors, including the fast- growing pharmaceuticals. The Finance Minister reiterates his commitment to keep current account deficit and fiscal deficit under control," Saldanha said.
"The Medical Council recently amended its guidelines to encourage doctors to prescribe generic names of medicines. In the Budget, it has been indicated that changes may also be introduced to the Drugs and Cosmetics Rules along similar lines. This will be a significant change if introduced and pharma firms will have to alter their marketing strategies" said Bhavik Narsana, Partner, Khaitan & Co.
