Karnataka pharmaceutical industry has welcomed the Union Budget 2009-10 presented by finance minister Pranab Mukherjee although the Budget contained no specific proposals to give a boost to the pharma sector.

According to Anjan K Roy, president, Karnataka Drugs Pharmaceutical Manufacturers' Association (KDPMA) and managing director, RL Fine Chem the budget is an overall mix of short term stimulus, medium-term caution and long term-structural reforms, going by the increase in investment for infrastructure, scarping of fringe benefit tax. "We appreciate the finance minister effort to decrease the Customs duty from 7.5 per cent to 5 per cent on two specified life saving devices used in treatment of heart conditions. These devices will be fully exempt from excise duty and countervailing duty (CVD) also," he said. However, the pharma manufacturers were expecting more announcements from the budget.

"Overall the budget is not encouraging, looking at the global recession the Minister would have taken more proactive step to support Pharma Industry. Abolishing FBT and decrease in surcharge on IT could be satisfactory move. Further increase on MAT will have a negative impact. Ignoring Pharma Industry on excise duty as well as customs duty on raw material is a bit discouraging," Shailesh Siroya, managing director Bal Pharma Limited said.

Jatish N Seth, secretary, Karnataka Drugs Pharmaceutical Manufacturers' Association and director Srushti Pharmaceuticals Pvt Ltd, stated that the budget is a pragmatic one and maintained statues quo in terms of excise duty. What needs to be appreciated are the removal of fringe benefit tax and commodities transaction tax. "Although we cannot expect rapid changes in the pharma sector, the drug manufacturers are upset over the lack of thrust on research and development even if Finance Minister stated that the scope of the current provision of weighted deduction of 150 per cent on expenditure incurred on in-house R&D to all manufacturing businesses except for a small negative list," he said. The industry is also sore about the lvey of 15 per cent of Minimum Alternate Tax (MAT) was introduced to address inequity in taxation of corporate taxpayers.

Commenting on the support towards the healthcare sector, R Basil, director and CEO, Manipal Hospital, Bangalore said that it is a good effort by the Finance Minister to reduce the life saving drugs from 7.5 per cent to 5 per cent. The increase of Rs 2,057 crore over and above Rs 12,070 crore provided in the Interim Budget for the National Rural Health Mission (NRHM) is to be lauded as this is the only way to bridge the gap between the rural and urban healthcare infrastructure.

According to Dr B S Ajai Kumar, chairman and CEO, Healthcare Global Enterprises Ltd (HCG) - South Asia's largest cancer care network, the Finance Minister has taken cognizance of breast cancer related life savings drugs and has lowered the customs duty besides exempting it from excise duty and countervailing duty. "However we feel the finance minister should have gone one step further and removed customs duty on all cancer related life saving drugs and medical equipments. Even countries like Bangladesh do not levy customs duty on cancer drugs and equipment, while an emerging economy like ours is making oncology care expensive owing to various levies. Given the growing incidence of cancer in the country, we should be in the forefront to make oncology care more affordable. Therefore excise rate for all cancer related life saving drugs should be removed," he added.