Union Budget 2016-17: Dr Shailesh Ayyangar, President – OPPI and Managing Director – India and Vice President –South Asia, Sanofi
I haven’t seen a bold approach to increase financial outlay for healthcare sector
We welcome the fact that the finance minister has named healthcare as one of the nine pillars of the Union Budget 2016. Our country’s demographic dividend can accrue only if we give priority to healthcare sector. I haven’t seen a bold approach to increase financial outlay for healthcare sector, in view of the stated objective of increasing healthcare spends from current 1.2 per cent of GDP to 2.5 per cent of the GDP. There are relatively few salutary provisions for this sector.
Insurance cover, benefits for the elderly and more government drug stores are welcome steps, as are the proposed national dialysis centres, where the equipment will also have concessional duties. From pharmaceutical sector perspective the expectations were higher, but I haven’t come across any specific provision that merits attention. The only relevant provision is the taxation of royalty income at 10 per cent in respect of innovations discovered and registered in India. We had hoped that concessions on R&D for the life sciences sector would continue at 200 per cent, but these are to be phased out to become aligned with other industries. There was also no mention of incentives for pharma clusters, especially for API manufacturing.