Union Budget 2019 evokes mixed reviews from the pharmaceutical industry
Satish Reddy, Chairman, Dr Reddy’s Laboratories
The expectations from the Union Budget 2019 were that of a bold reformist budget, however, it turned out to be an incremental budget at best. The emphasis on start-ups and on the education sector is a good move. However, there was nothing to fuel growth in the healthcare and pharma sectors, which is disappointing. I was particularly keen on seeing a change in the weighted deduction for R&D which did not happen. A positive policy move of this kind would have spurred R&D and innovation in pharma and other sectors.
Pushpa Vijayaraghavan, Director and Practice Lead, Healthcare and Lifesciences, Sathguru Management Consultants
The Budget has substantial incentive for startups and small to medium businesses; and the move to expand the 25 per cent tax rate to companies with revenue upto Rs. 400 crore is commendable. The measures to support the startup landscape – particularly eliminating scrutiny on capital gains in the case of angel tax and expanding fair market value justification exemption to Category I AIFs could help strengthen the funding ecosystem in the country.
However, I would have liked to see greater reflection of fund allocation or tailored programme announcements to support the Make in India and Ayushman Bharat programmes, marque initiatives of Prime Minister Modi that are particularly relevant for companies across the continuum of pharmaceuticals, biotechnology, medical devices, diagnostics and healthcare delivery. If the lofty vision of Ayushman Bharat is to be accomplished, implementation budget and plans should be progressively and substantially bolstered. With the exception of incentives to multinational companies for creation of mega manufacturing parks, there is no meaningful reform to foster scaling of Indian manufacturing footprint, especially in sectors that are still heavily import dependent such as medical devices.
Additionally, given the crossroads the pharma and biotech industry is at today, it is also critical that there is encouragement for multifold increase in level for research engagement. There are no tangible provisions in the budget that will help substantially elevate competitiveness of the industry.
Overall, the budget is in my view a good wellness prescription for the overall economy but lacks specialist’s clinical interventions in specific parts where the economy’s health is relatively poor and needs an injection of support.
Dr Prasanna Deshpande, Deputy MD, Indian Immunologicals Limited
This budget included many development reforms for the Indian economy including developing skills resulting into creation of employment. Though there were no new announcements in this budget specific to healthcare and biotech/life sciences, however in the interim budget earlier this year, already an allocation of Rs 61,398 crore was announced for the health sector for the 2019-2020 fiscal which was a 16 per cent increase in the last year’s allocation. This showcases that healthcare has a strong focus from the government. Under Swachh Bharat Abhiyan, the construction of toilets making more than 5.6 lakh villages Open Defecation Free (ODF) will also play a role in reducing many food and water-borne diseases getting spread.