Article - Budget sops give Pharma sector a shot in the arm

The pharma sector got a shot in the arm, as Finance Minister P Chidambaram allocated Rs 16534 crore for the health sector for FY09 in Budget 2008. He has also hiked the allocation to the National Rural Health Mission by 15% and has announced a health cover of Rs 30,000 for every worker in the BPL category.

Malvinder Singh, CEO at Ranbaxy Laboratories says that, "This is a very positive Budget for healthcare, hospitals and pharma companies. The weighted deduction of 125% to R&D will add back significantly to profits. Custom duties for lifesaving drugs coming down, excise duties coming down to nil for lifesaving drugs; for HIV AIDS products excise duties coming down is a very strong message for the industry, for the consumers. It's extremely positive - could not have asked for anything else. It is good for the industry, for the consumers."

Kiran Mazumdar-Shaw, CMD at Biocon Limited feels that the healthcare sector will be well satisfied with Budget 2008.

She says, "The healthcare sector is a major beneficiary of Budget 2008. India's emerging role as being the preferred destination for drug development coupled with an increasing need to bring down drug prices have been the key factors in this year's budget SOPs. The sops have come as a pleasant but welcome surprise and have more than met industry expectations."

Weighted average tax deduction on outsourced R& D, which sends a strong signal of the potential that discovery research holds for the Indian Pharma and Biotech industry, she added.

Links to the articles:

http://www.moneycontrol.com/india/news/budget-news/budget-sops-give-pharma-sectorshotthe-arm/18/05/328649

http://money.cnn.com/news/newsfeeds/articles/newstex/AFX-0013-23391339.htm