Unon finance minister Pranab Mukherjee, who presented the Union Budget in Parliament today, has increased the plan allocation for the Ministry of Health and Family Welfare from Rs 19,534 crore to Rs 22,300 crore for the financial year 2010-11.

In his rather lacklustre budget from the pharma point of view, Mukherjee has provided a boost to the research and development (R&D) activity across all sector of economy. Weighted deduction on expenditure incurred on in-house R&D has been enhanced from 150 per cent to 200 per cent. Weighted deduction on payments made to National Laboratories, Research Associations, Colleges, Universities and other institutions for Scientific Research has been enhanced from 125 per cent to 175 per cent.

Payment made to an approved association engaged in research in Social Sciences or Statistical Research will be allowed as a weighted deduction of 125 per cent. The income of such approved research association shall be exempted from tax.

Mukherjee also proposed to prescribe a uniform, concessional basic duty of 5 per cent, countervailing duty (CVD) of 4 per cent with full exemption from special additional duty on all medical equipment. A concessional basic duty of 5 per cent is being prescribed on parts and accessories for the manufacture of such equipment while they would be exempt from CVD and special additional duty. Full exemption currently available to medical equipment and devices such as assistive devices, rehabilitation aids etc. is being retained. The concession available to government hospitals or hospitals set up under a statute is also being retained.
For the manufacturers of orthopaedic implants, the finance minster has proposed to exempt specified inputs for the manufacture of implants from import duty as there was demands from the manufacturers that their inputs attract a higher rate of duty than the finished product.
In his speech, Mukherjee also proposed that an Annual Health Survey to prepare the District Health Profile of all Districts shall be conducted in 2010-11. The findings of the Survey should be of immense benefit to major public health initiatives particularly the National Rural Health Mission, which has successfully addressed the gaps in the delivery of critical health services in rural areas.