The Pharmaceutical Manufacturers Association (PMA) of Kerala has welcomed the proposal of Kerala Finance Minister to introduce the input tax credit system in the new state Budget.

The state government has been following a practice of compounding system of taxation which was causing a lot of inconvenience to the manufacturers in general. The new system of input tax credit system will be less cumbersome for the manufacturers across various industry segments, he said.

According to A M D Nambudiri, president of the Association, the state budget, overall, was good for the healthcare sector but has no proposal specifically benefiting the pharmaceutical industry.

Speaking about the proposal to impose 4 per cent tax on life-saving drugs, he said that this move was taken by the government as it was alleged that the drug manufacturers were not passing on to the consumers the benefit of the tax exemption currently given on such products.

"I have not gone through the entire text, but I can only say that this move has not been entirely harmful or too beneficial. It has adopted a neutral stance. But this time the government has provided us with the input tax credit which was not prevalent till today," said Nambudiri.

The Minister had assured that by imposing tax on life-saving medicines their prices would not shoot up. The reason given for this is that the medicines were being sold at their maximum retail prices (MRP). According to the Minister, the MRP, as per the Union Government stipulations, included tax. Prices would not come down just because Kerala alone avoided tax on the medicines.

Apart from this, the budget also proposes a new system during the year for the procurement and distribution of quality medicines at the lowest rate. In addition, local self-government institutions can spend 20 per cent of the maintenance grant.

There are also plans to initiate a public health laboratory at Kannur for which sufficient funds have been provided under the Non-Plan provision. This is for facilitating easy availability of medicines and other essential items in hospitals.

A committee will be formed to frame suggestions for the comprehensive development of Ayurveda sector. Around Rs. 65 lakh has been provided for starting new Ayurveda dispensaries and for improving existing facilities.

Nearly Rs 1 crore has been provided for purchasing land for the expansion of Homoeopathic Cooperative Pharmacy at Alappuzha. A sum of Rs. 8 crore has been allocated for development of Siddha, Unani, Naturopathy, and Holistic Medicine.