2014 will be an election year where the people will decide who will be the government at the centre for the next five years. The time is also ripe for the UPA government to give to the people of India a visionary budget that will be a harbinger of change.
Education and healthcare will need to be high on the agenda of the present UPA government as both sectors need a boost in budget 2013. Infrastructure in both these sectors needs to be strengthened by way of tax incentives that will serve to encourage investments in these areas. Rural and semi-urban areas in India lack basic healthcare infrastructure. A weighted deduction for investment and expenditure incurred in these areas should be provided. Accordingly healthcare infrastructure status together with hiking the allocation to healthcare will go a long way in improving the economic and health indicators of our country.
These together with creative policies will serve to deliver top quality healthcare. India needs to foster an ecosystem that will not only encourage R&D but will also allow it to flourish. A way to do this would be to introduce research tax credits which can be used to offset future tax liability along the lines of existing systems in developed economies.
Another would be to recognise the lengthy, risky and expensive processes involved in drug discovery by according benefits to units engaged in R&D and all income generated from the utilisation of Intellectual Property should be exempt from tax. Contract manufacturing which is a growth driver for the pharmaceutical industry should receive tax benefits by way of profit- linked incentives.
All life-saving drugs, including medical devices, that are imported should be exempted from payment of customs duty. Diagnostic equipment and its consumables required to detect life-threatening illnesses should be exempt from payment of both customs and central excise duties. Customs duty for formulations needs to be rationalised in line with the recommendations made by the Chelliah Committee. Reduction in duties on health supplements would make these products more affordable to the common man and serve as a boost to the healthcare agenda of the government.
Clinical trials need to be given priority status with all expenditure pertaining to such trials at approved hospitals being eligible for weighted deduction. The additional customs duty on import of vaccines, special medicaments and health supplements imported into India should be at a lower rate of two per cent. Health insurance by individuals needs to be encouraged and the quantum of deduction allowed to individual and senior citizens should be increased to also reflect rising costs.
Budget 2013 presents the government and its Finance Minister an opportunity to come good with a visionary budget – a legacy that will be the forerunner to change.
– Ranjit Shahani, President, Novartis Group and President Organization of Pharmaceutical Producers of India and Country
