Despite a few concessions for the pharmaceutical sector in the Union Budget, 2007-08, most of the pharma scrips declined sharply on account of heavy selling pressure. The BSE Healthcare index of 23 major companies opened at 3562.24 on February 28 (Pre-Budget), but declined sharply by 63.31 points to 3498.93 at the close of the day. The Indian scrips like Ranbaxy, Glenmark, Aurobindo, Nicholas, Sun Pharma, Divi's Lab and Zandu Pharma went down heavily. Further, the share price of MNCs like Aventis Pharma, GlaxoSmithKline and AstraZeneca also declined on Budget day.

Though the pharma industry received some concessions like, reduction in excise duty on medical equipment to 5 per cent from 7.5 per cent, the tax benefit on R&D investments and venture capital funds benefit to Biotech, Nano tech and other select pharma segments, the heavy selling pressure impacted pharmaceutical shares adversely during the day. The Budget also exempted clinical trials from service tax. The Budget has focused on HIV TB and malaria diseases and provided allocations. The Pharma industry players expressed that the concessions for the industry will maintain the positive growth in the current year.

The trading community, however, was not happy with certain provisions related to the capital market and BSE Sensex moved down sharply by 541 points to 12,938.09 at the close of the day. The other Asian markets as well as European and US market also experienced same trend on account of selling pressure. The announcement of higher dividend distribution tax, fringe benefit tax on ESOP, higher excise on cement and minimum alternate tax for IT companies pushed down the Sensex sharply.