Pharma sector welcomes Budget

The pharmaceutical and health industry hailed Finance Minister P Chidambaram's Budget 2005-06 as balanced. Some claimed that it had given a ray of hope for rural and other weaker sections of the society.

Fortis Health Care CEO Daljit Singh told Business Standard, "We were expecting the Centre to create opportunities for private players to invest in medical colleges, nursing colleges and hospitals, which has not been addressed." There has to be an environment for attracting capital investment in this segment he said.

Representatives from the pharmaceutical industry were, however, happy with the proposed exclusion of fringe benefit tax on free samples of medicines and of medical equipment distributed to doctors. "The fringe benefit tax should have been abolished," said an industry person.

Jagdeep Singh, president of Punjab Drug Manufacturers, said the Budget provided no relief for the small and medium enterprises in the pharmaceutical industry.

"We don't mind regional disparity, but wanted a level playing field," said Singh. He said that the Punjab pharmaceutical industry wanted the excise duty on drugs to be reduced from 16 per cent to 8 per cent and the excise exemption for small-scale industries increased to Rs 5 crore from the current Rs 1 crore.

According to Sanjeev Sachdeva, president, Surya Pharmaceutical Ltd, the industry did not have much expectations with elections going to take place in four states. "Incentives on research and development would have been welcome with competition from global participants heating up," said Sachdeva.