The proposals of Union Budget for the year 2015-16 generated subdued sentiment among investors in respect of pharmaceutical segment and shares registered small gains. Investors were hoping more financial incentives for research and development activities as well as exports. Several major scrips posted small post-budget gains.

The finance minister slashed the allocation of healthcare to Rs.33,150 crore from Rs.39,238 crore in the previous year budget and not declared any major reforms. India is spending huge amounts on importing medical devices and budget failed to give any concessions. However, the higher exemption of Rs.25,000 investment in medical insurance may offer some assistance. Setting up of five new AIIMS, provision of Rs.150 crore for scientific research and additional healthcare infrastructure in every state may be add advantage.

Though the pharmaceutical segment did not received any direct focus, the overall investors sentiment remained under pressure and there was mix reaction to budget proposals. The BSE Healthcare index of 16 companies improved only by 2 per cent after announcements of Budget and closed at 15854.60 points as against previous close of 15539.50 points. The BSE Sensex of 30 companies remained volatile and closed higher by 0.5 per cent to 29,361.50 points on February 28, 2015.

The major pharma scrip like Ajanta Pharma, AstraZeneca Pharma, Aurobindo Pharma, Natco Pharma, Ranbaxy, Sun Pharma Advance Research Co (SPARC) and Sun Pharma registered gain of over three per cent. SPARC scrip improved by 10.2 per cent to Rs.419.10 from its previous close of Rs.380.45. Ajanta Pharma scrip moved up by 6 per cent to Rs.2887 from Rs.2722.55 and AstraZeneca Pharma by 6.7 per cent to Rs.864.90 from Rs.810.35.Cipla and Dr Reddy's Laboratories improved only by 1.8 per cent and 2.6 per cent to Rs.681.50 and Rs.3349.65 respectively. Wockhardt moved up by marginally to Rs.1583.35 from Rs.1582.15.

Manpreet Sohal CEO, Global Hospitals Mumbai & Hyderabad, said, “The budget has announced a few initiatives in healthcare sector, some of the notable ones are the proposition of 5 new AIIMS is promising and we are glad that the government is stepping up the healthcare infrastructure in every state. The government has also promised quality medical facility in every city, village and district by 2022. The sector was hoping the budget would breathe some life into economy, the allocated healthcare budget for this year is about 33,150 crore. Just compare it with the previous year, in 2014 –2015, the allocated budget was 39,238 which was slashed by 20 per cent. The initiatives on social security, senior citizen welfare fund and allocation of corpus through EPF and PPF are out of the box thinking , and it can change the landscape in these areas."

Anjan Bose, Secretary General, NATHEALTH, said “Announcement of new AIIMS for Jammu & Kashmir, Punjab, Himachal Pradesh, Tamil Nadu, Assam and one more for Bihar, as the state needed more augmentation for healthcare, is definitely a good step. Proposal for pharmaceutical institutions in Madhya Pradesh, Rajasthan and Chhattisgarh is a good initiative for indigenous research”.