There are mixed reactions to the Union Budget presented by Union finance minister P Chidambaram on February 28. While a section of the industry welcomed the budget, a large section of the pharma industry expressed unhappiness on the budget.
There is nothing significant in this budget for the healthcare sector as such, said Organisation of Pharmaceutical Producers of India (OPPI) director general Tapan Ray. However, he appreciated the increased allocation for National Rural and Urban Health Mission. Ray also lauded the proposals like increased budgetary allocation for medical studies, expansion of medical care facilities for women and differently-abled, increased allocation for geriatric care, setting up of Indian Institute of Biotechnology, and allocation of fund for products based on science and technology innovations.
“We were hoping the budget would breathe some life into the economy. The expectations of a big bang announcement to restart the economy were belied – expectations were high. Given what the market was grappling with there is a dearth of big ideas,” commented OPPI president Ranjit Shahani.
On the other hand it is a responsible budget given the fact the fiscal deficit is being brought down from 5.3% to 4.5%. The allocation of Rs.37,330 crore to the Ministry of Health and Family Welfare is welcome, particularly the increase of 24.5% over the revised estimates for the new national health mission, Sahani added.
Welcoming the budget, Kiran Mazumdar Shaw, CMD, Biocon, said, “The FM's directional intent is good and the investment signals are positive. However, implementation and fiscal prudence still remain a concern. Bolder measures could have been taken to kickstart growth as projected in the National Economic Survey. The focus on skill development through a special fund for the youth along with the provision to recognize corporate investments in Technology incubators as CSR, will favor self-employment and entrepreneurship. The pharma sector has received scant attention. Overall a positive budget which may not deliver the intended >6% growth.”
"This is another year in which Health Sector overall has been ignored by the Government. We wanted status similar to Infrastructure Status, Incentives for Local Innovation and Manufacturing in the Med Tech Industry and Higher Tax Exemption for Annual Health Checkups etc to achieve the Health For all by 2020 Objective. But the entire health sector has been ignored with marginal Budget Allocation increase in the Govt spending on healthcare,” reacted Dr G S K Velu, Founder and MD of Trivitron Healthcare.
Ameera Shah, MD & CEO, Metropolis Healthcare commented, “Although the increase in allocation for healthcare is a positive move, but is certainly not enough. As I had mentioned earlier, for the sector to make significant strides a minimum allocation of 4 to 5% of GDP is necessary. Although an increase in spending has been promised, a more sound allocation of resources is crucial for India to enjoy its benefits. Need of accountability on money spent is crucial to effective implementation of healthcare programmes, including the flagship National Health Mission.”
Amit Mookim -- Partner, National Industry Head – Healthcare, KPMG in India reacted, “The budget has announced a few key initiatives in healthcare. Some of the notable ones are around a mainstreaming of Ayush practitioners that if implemented effectively will partly address the need gap for doctors and healthcare professionals in the country. Additionally, the investment in both teaching hospitals and medical colleges will enable bridging the capacity gap in the sector. Initiatives around infrastructure investment and sops thereof would enhance both domestic and foreign investment in infrastructure creation in the sector.”
Commenting on the budget, Pawan Chaudhary, CMD, Venus Remedies Limited, said, “Budget is indeed not on the expected lines as industry was waiting for impetus. However, it is heartening to note that the Finance Minister is able to maintain the fiscal discipline which may be healthy for the economy in the long run.”
“There is nothing specific for pharmaceutical sector, however a robust allocation of budgetary support to the healthcare sector shall augur well to improve healthcare in India. The actions imbibed in 24% increase in budget allocation, separate allocation for medical education, training & research, national program for healthcare for elderly and support for 6 AIIMS like institutions would pave a good path for healthcare. Being a research driven company, it is pleasant to note that Finance Minister has also touched on science & technology and has initiated good allocations. We would like the innovation scenario in the country to improve at a much faster pace,” Chaudhary added.
The Budget focuses on poverty alleviation, rural development and employment generation. There are no specific measures to benefit the biotechnology industry or the vaccine industry in terms of tax exemptions or benefits. However, increased outlay for health and agriculture in general and specifically for the Rashtriya Krishi Vikas program and the new National Livestock Mission will have spin off benefits for our industry, commented, K V Balasubramaniam, managing director Indian Immunological Limited.
Dr PM Murali, president, Association of Biotechnology Led Enterprises (ABLE) commented, “The Union Budget for 2013-14 is not encouraging for the biotech sector as proposed by ABLE on behalf of the industry. Exemption from excise/custom duties on life saving medicines as well as on their raw materials and exemption on capital goods and consumables, CRO’s, diagnostic kits have not been considered. Somebody has to realize these are important parts of health care. Also there has been no measures providing tax holidays or soft loans to this sector. The heartening fact is that the plan outlay for Science and Technology has increased and there are some announcements in the agriculture area where two new Biotech Institutes are coming up. More outlay to Ayush is certainly a good step in the right direction”.
Reacting to the budget, Dr A M Arun, chairman of Vasan Healthcare said, "The Finance Minister has very rightly accorded top priority to the health of the citizens with a stepped up increase of over 24% to the national health mission. He has also realised the need to augment supply of medical professionals and has increased the contribution to the newly started 6 AIIMS like institutions as also increased the allocation to medical education and research. We also most heartily welcome the investment allowance of 15% intended to spur asset creation and hope the benefit of the same will be available to investments in medical equipment by healthcare providers, who operate in a capital intensive business”.
Commenting on the budget, Kairus Dadachanji, managing director, SCHOTT KAISHA, said, “I welcome the Union Budget 2013-14, since it is growth and investment oriented. Increased expenditure on healthcare and healthcare infrastructure will boost our industry, create employment and benefit citizens. The budget proposals are conducive for the growth of India’s healthcare sector as they focus on inclusive and sustained development. Of particular benefit is the 24.3% increase in the National Health Mission program. Other commendable initiatives have been taken in critical areas such as investment in manufacturing and infrastructure, MSME growth and capital market development. Those areas directly and indirectly benefit the pharmaceutical and health sector. Furthermore, the enhanced focus on investing in more AIIMS like institutions and in increased skill development are positive initiatives which also increase opportunities for India’s youth.”