Expressing their concern over lack of proper incentives for the pharma industry, experts feel that the Union Budget proposals for 2012-13 has ignored the major demands of the pharma sector. Many pointed out that the healthcare concerns of the country have not been given adequate importance in the current budget that would have aided in improving the healthcare needs of the nation.

The Organisation of Pharmaceutical Producers of India (OPPI) pointed out that overall, there is nothing significant in this budget for the healthcare sector, however the association did acknowledge  some of the initiatives taken by the government like infrastructure building, improving access to medicines, reduction in tax burden and other measures etc.

Expressing his views on the budget of 2012, Kewal Handa, managing director, Pfizer informed that in their efforts to address the fiscal deficit, the government has raised service tax rate from 10 per cent to 12 per cent, hiked the standard excise duty from 10 to 12 per cent thus adversely affecting the common man who is already burdened due to rising costs and inflation.

He added, “The pharmaceutical industry does not have much to cheer about in this budge as one percent increase in excise duty will result in a 1.5 per cent increase in drug price. It is ironical that on one side the government is trying to reign in prices of drugs and on the other increasing taxes and duties on drugs.”

Many experts informed that the Prime Minister’s promise to increase the spend on public health to reach 2.5 per cent of GDP in next five years was not reflected in the budget. They pointed out that to reach that number, expenditure should more than double in five years whereas budget provides only 15 per cent increase.

According to Kiran Mazumdar Shaw, chairman and managing director, Biocon, “As far as biotechnology is concerned, I am pleased that the Finance Minister has extended the 200 per cent weighted deduction on R&D to provide an impetus to research by five years. However, we must look at the fine-print to check whether industry requirements for overseas spends and international patent filings have been met.”

She further stated, “While the government has forecasted a GDP growth of 7.6 per cent, I am skeptical about its attainability in the present climate. It is an understatement to say that the past year has been troublesome for the country as global slowdown and home-grown political crises have tied the government’s hands and scuttled India’s growth. With this Budget, the government had another opportunity to assure investors, increase investment, revive the economy, and promote inclusive growth. However, it is sad that it failed to meet these objectives.”

Rajen Padukone, CEO, Manipal Hospitals pointed out that if the corporate hospitals are not exempted, from service tax it is a concern area for everyone. The hospital bill goes up by 12.36 per cent and even if the same abatement (50 per cent) is extended like last time proposal, the increase will be 6.18 per cent which could be a definite extra burden to the patients.

Krishna Prasad, managing director Granules India informed, “The government missed an opportunity to improve the country’s fiscal health by not reducing subsidies. Instead of directing new revenue into programs that offers short-term benefits and hurt the country over the long-term, it would have been prudent to hold on to the revenue to demonstrate the government is serious about reducing the fiscal deficit or at the very least, invest in capital expenditures, which will benefit the country and ultimately improve the growth rate.

Giving a neutral view Vishal Bali, CEO Fortis Healthcare PTE pointed out that in a tough economic scenario, the budget is modest and will not do much to boost the economy, however, he said that the execution of measures offered by the Finance Minister will be important.

Some pros that the industry experts highlighted from the budget this year are concession on spend on preventive healthcare, as this will encourage people to go for preventive checks. customs duty exemption on certain life saving drugs for HIV, renal cancer since these drugs especially cancer drugs are very expensive at the moment, customs duty cut on certain medical devices.

However the industry equivocally feels that the government could have extended a health insurance cover to BPL families and at least laid the foundation stone for a National Healthcare System.