New Delhi | Jagran Business Desk: The pharmaceutical industry wants the Centre to increase the overall fund allocation for the healthcare sector and focus on policies that encourage research and development (R&D) in the upcoming Union Budget 2022 as the country continues to battle the deadly COVID-19 pandemic.
Similarly, the industry wants the central government to continue the tax concessions on various drugs and simplify some processes to enhance the ease of doing business for the private sector companies.
Speaking to news agency PTI, Organisation of Pharmaceutical Producers of India (OPPI) president S Sridhar said that the Union Budget 2022 will be crucial to accelerate the pharma sectoral growth as India aims to provide its citizens access to innovative health solutions.
"An increase in the budgetary allocation from the current 1.8 per cent of the GDP to 2.5-3 per cent, as envisaged in the National Health Policy 2017 along with a separate allocation for the biopharmaceutical sector R&D is imperative," he said.
During the conversation, Sridhar also noted that the Centre should continue with the existing Customs duty concessions for medicines as any discontinuation thereof in the current scenario will impact the accessibility of such medicines at affordable rates.
Agreeing with him, Indian Pharmaceutical Alliance (IPA) Secretary-General Sudarshan Jain said that the R&D is critical in the pharma industry and the Centre needs to bring policies to support it in the upcoming budget.
"Additional measures towards improving ease of doing business in the pharma sector with an emphasis on simplification and making the process industry-friendly, with specific provisions for eliminating bottlenecks will encourage investment, thus, contributing to the long-term growth of the industry," Jain told PTI.
"This will help in meeting unmet patient needs in an affordable manner. We are looking forward to the budget that will help in fuelling innovation and advancing the Indian pharmaceutical industry from Make in India to Discover and Make in India," he added.
Maharukh Rustomjee, Managing Partner at AmaterasuLifesciences LLP, also agrees that the Centre needs to boost R&D in the pharma sector and stressed that tax burden on companies should be reduced. She also said that funding opportunities need to be increased as "most funding on research in non-COVID projects was diverted to COVID projects".
"Smaller Pharmaceutical Research based start-ups, like ourselves who outsource scientific work heavily, rely on contract research organizations (CRO’s) and utilize the funds otherwise invested in infrastructure, for actual technology development, while also generating revenue and employment for the CROs. However, we are subjected to a heavier tax burden than the larger pharma companies with in-house research facilities, who enjoy several tax benefits for their approved R and D Laboratories," she told Jagran English.
"Apart from this, start-up and SME’s like us also end up paying 18 per cent GST on all CRO and similar services which stretches our cash flow and creates liquidity challenges. Our first expectation from the budget would be to somehow help research based innovative start-ups on this tax burden."
Meanwhile, NATHEALTH - a healthcare industry body - wants the Centre to boost the healthcare infrastructure so that people have better access to such facilities. Its president Harsh Mahajan has said that targeted skilling and medical education programmes should be introduced to tackle manpower shortage issue.
"The pandemic has made us realise the need of providing hospitals in tier 2 and 3 towns with adequate infrastructure such as diagnostic centers, oxygen beds, ICUs and oxygen plants through increased budget outlay and greater investments. This will also help in creating employment opportunities and increase health system resilience," Mahajan told PTI.
"The sector has not been able to derive the benefits of the GST transition. In fact, the embedded taxes in the sector have increased in the post-GST regime compared to pre-GST scenarios. Therefore, it is vital to rationalize GST to unlock the embedded credit which is trapped in the healthcare value chain," Mahajan added.
Finance Minister Nirmala Sitharaman will present the Union Budget 2022 on February 1.
Posted By: Aalok Sensharma