Seeking an increased thrust for research and development in the area of biotechnology, the Association for Biotechnology-Led Entrepreneurs (ABLE) and Confederation of Indian Industry (CII) have submitted a series of budgetary recommendations to the Centre calling for fiscal incentives and concessions to achieve this.

The major recommendations include concessions like exemption on import and excise duties, increasing tax deductions and setting up of an exclusive biotechnology fund of Rs. 10 crore.

The recommendation, which seeks import duty exemption for all capital goods and consumables used by DSIR-registered companies (Department for Scientific & Industrial Research) for biotech research, would cost the exchequer a mere Rs. 50 crore, while the saving on research costs will lead to increased spending on research.

Kiran Mazumdar Shaw, chairperson, ABLE, said that the increase of the weighted tax deduction on R&D from the present 150 percent to 200 percent will enable reinvestment in R&D in an incremental manner while costing the exchequer just Rs. 30 crore.

"Similarly, exemption of excise duties and sales tax on indigenously developed biotechnology products on both raw materials and finished goods will help not only competitive pricing but also enable recovery of R&D investments to be reinvested," she said.

Another recommendation to the Centre was the exemption of withholding tax for technology transfer and technology licensing in biotechnology. This, Shaw said was an enabling policy that will bring about a strong IP culture within the country as well as play a key role in allowing Indian biotechnology sector to conduct cutting edge R&D.

"The importance of this policy is to resolve a long-standing issue pertaining to a taxation treatise that calls for withholding tax whereas most of the international companies licensing high technologies are unable to offset such taxes and the burden then consequently rests on the Indian licensee," she said. Calling for a dedicated biotechnology fund of Rs. 10 crore for providing seed capital to scientist entrepreneurs as soft loans at the start-up stage, Shaw said this is fundamental to encourage entrepreneurship amongst the scientific community and scientist entrepreneurs are key to sustained growth of the biotechnology sector.

Besides the Rs. 10-crore fund, ABLE and CII also called for the creation of a dedica-ted fund of Rs.100 crore for biotechno-logy under the NIMITLI (new millennium leadership in technology) programme to augment IP (Intellectual Property) creation in the public-private partnership.

Stressing on the necessity of extending all fiscal incentives offered to SEZs (special economic zones) to biotechnology parks, Shaw said biotechnology parks provide a powerful clustering model that is key to building a strong biotech sector where industries feed off each other in a complementary manner. Lack of such incentives is the reason for low-occupancy in the several State-sponsored biotechnology parks. With almost no burden on the exchequer, this measure will render investments profitable, she said.