The industry associations and experts in the pharma and health sectors have by and large termed the union budget presented by finance minister Pranab Mukherjee as low key budget and disappointing.

Terming the budget as a low key one, Confederation of Indian Pharmaceutical Industries (CIPI) chairman T S Jaishankar said that the Finance Minister has delivered a confused and mixed bag of budgetary proposal. While attempting to curtail inflation and increase industrial output, he has balanced investments in equity.

However increase in service tax and excise duty will directly have impact on all industries, particularly the pharma sector. There is no special incentives to increase productivity. Overall budget may be considered as a very low key budget and will not be beneficial to the pharma sector,  Jaishankar said.

Welcoming several measures like weighted deduction of 200 per cent on all in-house R&D and Rs. 5000 crore allocation for SIDBI for SMEs, IDMA secretary general Daara Patel said that the increase in excise duty will result in hike in prices of medicines as the manufacturers will pass on the excise burden to the consumers. Besides, the increase in service tax is also not a healthy sign, he said.

Terming the budget as disappointing, the Association of Biotechnology Led Enterprises (ABLE), while welcoming some of the measures, said that there was no major announcement to spur innovation and growth of the biotech sector, at a time when the government has declared this as the ‘Decade of Innovation’.

The weighted deduction of 200 per cent on all in-house R&D has been extended by another 5 years is a positive step. The reduction of customs duty from 5 per cent to 2.5 per cent on medical devices and CVDs such as stents and valves as well as customs duty reduction on vaccines, lifesaving and anti-cancer drugs is also a welcome measure, said Nitin Deshmukh, member, Executive Council of ABLE.

SG Biligiri, president, Karnataka Drugs and Pharmaceutical Association (KDPMA) said that it is unfortunate that the excise duty has been increased by 2 per cent, which is unwelcome. I hope it will not give a fillip to the  excise duty evasion business malpractices.

KDPMA member Jatish N Seth said that the rise in service tax will have a cascading effect on contract research and manufacturing services and is detrimental to the growth of the sector.

Dr Sanjeev Chaudhry, CEO, Super Religare Laboratories said that the healthcare delivery sector had significant expectations from the budget, only some of which have been realized in the announcements made by the Finance Minister. The initiatives in respect of exemption of Rs. 5,000 for Preventive Health Tests and larger outlay for the National Rural and Urban Health Missions augur well for the diagnostics sector, which plays a key role both in Preventive Health Segments and National Health Screening initiatives.

N Venkat, CEO, MD, Yash Birla Wellness on Health and Wellness sector said  “There are no major directional and strategic thoughts on health and wellness except in the vaccination programmes. Services tax increase from 10 to 12 per cent will have negative effect on cosmetic medical services, modern spa which are all wellness services. Also increase in excise will have increase in prices of wellness products. Custom duty reduction of some health foods like soy protein and probiotics is a welcome move. It is disappointing to note that similar reduction is not done in other health foods like whey protein based products. Overall, there is nothing in budget that is encouraging for health and wellness sector.”

According to Ameera Shah, MD & CEO, Metropolis Healthcare Limited & co-chairperson of FICCI's Healthcare Committee, the importance given to preventive healthcare in the budget comes in as a relief. However, the industry expected much more than this. There has been no decrease in customs duty on lifesaving medical devices or diagnostic reagents, no subsidies for setting up healthcare in small towns in India, no tax benefits for investment in healthcare and no mention of a PPP model. It shows that health of the common man is of little interest and will be ignored for one more year.

Dr Sudarshan Ballal, medical director, Manipal Hospitals, said that overall it is a very average budget and will be rated at 4 out of ten as it is a big disappointment. The overall increase in allocation for health care far less than expected. Service tax a major burden for patients. There are no radical measures to improve health care delivery to the masses. In addition no incentives for the private sector to invest in healthcare especially in underserved areas. However,the silver lining is in Duty exemption for cancer and HIV drugs, Exemption in customs on some medical equipment, Concession on spend on preventive healthcare and Increase on spending for NHRM.

Gaurav Malhotra, MD & CEO of Patni Healthcare said that apart from a Rs. 5000 tax benefit for health prevention screening, there has been no major positive intervention on the part of the government towards improving this sector. With a shortage of 3.6 mn beds, 1.9 mn doctors & 3.7 mn nurses, the vision of achieving a doctor population ratio of 1:1000 is still a far-fetched reality. Moreover, an increase in Service Tax from 10 per cent to 12 per cent will result in an additional financial burden to be borne by the end recipient.

According to Vikram Vuppala, founder and CEO, NephroPlus, the good news is about increased allocation for NRHM and the government's announcement to launch the National Urban Health Mission (NUHM) which will help the patients in the economically backward category to access tertiary healthcare. Under this initiative, the government has also looked into establishing seven medical colleges on par with the AIIMS.