Budget 2022: Industry reacts
Following the announcement of the Union Budget 2022-23 by Nirmala Sitharaman, Finance Minister, let's have a look at what the pharma stakeholders have to say
The government could explore a 200 per cent weighted deduction and a separate allocation for R&D in biopharmaceuticals : S Sridhar, President, OPPI, and MD, Pfizer
The allocation for the health sector highlights commitment towards universal access to healthcare through the roll out of the National Digital Health Mission and the National Tele-Mental Health programme. While it is truly a growth-intensive Amrit kaal budget, focussed on increased investments and allocations at a foundational stage, additional thrust on R&D and investment would help sustain sectoral growth.
While the government’s thrust on PLI augurs well for the sector and the country at large, the dependence on imports for APIs and bulk drugs continues to be a challenge. There is a need to consider the introduction of an ‘RLI Scheme’ – Research-Linked Incentive scheme, which will accelerate an aatmanirbhar ecosystem for end-to-end development of pharmaceuticals – from bulk drugs to finished formulations.
The government could also explore a 200 per cent weighted deduction and a separate allocation for R&D in biopharmaceuticals for companies making investments to undertake research for new drugs, chemical entities and/or new biological entities to combat outbreaks. This would further augment foreign investments in R&D. Such measures could be explored in future allocations or as a series of mini-budgets which will enable strategic growth within a conducive regulatory ecosystem, which will be key to a healthier future for all.
Encouraging collaboration among academia, industry and public institutions is a strong measure to accelerate innovation in drug development : Ajay Tandon, MD, Veeda Clinical Research
The incentivisation measures announced for sunrise industries, which include genomics and pharmaceutical research and development, will augment our national capacities in these sectors. Encouraging collaboration among academia, industry and public institutions and the push for Ayushman Bharat Digital Mission are strong measures to aggregate our national resources for accelerating innovation in drug development and access to universal health in our country.
The direction that the government has taken is a positive step towards boosting the life sciences sector : Vijay Chawla, Partner and Head – Life Sciences, and Head – Risk Advisory, KPMG India
The budget reflects a new India moving towards greater mental health initiatives and increasing digitalisation for life sciences as a sector. It highlights the importance of a strong healthcare infrastructure backed by digital investments for long-term benefits in democratising the healthcare industry. A PLI scheme has also been introduced in the healthcare sector to reduce dependency on imports. The 35 per cent year-on-year increase in budgetary support to capital expenditure to Rs 7.5 lakh crores can boost spending on construction of hospitals and healthcare facilities, production of equipment, medical machinery as well as ICT equipment which can foster developments and further strengthen the healthcare sector. Overall, the sector seems poised for a fundamental shift with the implementation of a National Digital Health Ecosystem, National Tele Mental Health programme, continuation of Sabka Saath, Sabka Prayas, PLI schemes and Jal Jeevan Mission. The direction that the government has taken is a positive step towards boosting the life sciences sector.
The use of digital technologies will give birth to the exponential growth of nutraceuticals : Amit Srivastava, Chief Catalyst, Nutrify Today
The budget is an excellent one for digital technologies’ application in the healthcare ecosystem. There is a need for seamless integration of stakeholders of the industry, right from pharmacy to clinicians to dietary practitioners to hospitals, for effective patient management and efficient healthcare. The use of digital technologies will give birth to the exponential growth of nutraceuticals as a preventive category and also as adjuncts to optimise therapy leading to the evolution of nutraceutical medicines.
A lot was expected to boost pharma R&D : Maharukh Rustomjee Managing Partner, Amaterasu Lifesciences
While a lot was expected to boost pharma R&D, there is little to encourage companies like ours who work in the contract research segment and on innovative R&D projects with heavy upfront investment. However, focussed efforts, like the open platform for the National Digital Health Ecosystem, digital registries, and improved access and digitalisation of healthcare, are commendable, and are likely to benefit Indian people and also provide research opportunities in India and attract large players to invest in the healthcare sector. Various initiatives in digitalising India such as digital currency, further enabling of digital payments and ease of doing business are likely to support start-ups indirectly.
Ayushman Bharat Digital Mission could be a gamechanger for healthcare providers and indigenous drug manufacturers : Hitesh Windlass, MD, Windlas Biotech
It’s heartening to see that budget 2022 recognises and puts emphasis on the much-needed adoption of digital technology and telemedicine for achieving universal health coverage. It’s a visionary step that will play a significant role in how healthcare services are delivered in India. For instance, Ayushman Bharat Digital Mission could be a gamechanger for healthcare providers and indigenous drug manufacturers in bridging the urban-rural access divide in the healthcare sector. Over 60 per cent of the Indian population resides in rural areas. Hence, this platform would be crucial for keeping a tab on digital registries of health providers, health facilities, unique health identity for easy, transparent and affordable healthcare for all.
We laud the thrust on digital health mission and various digital-first initiatives : Sanjay Murdeshwar, Country President and Managing Director, Novartis India
The union budget highlights the government’s nuanced approach towards strengthening the country’s response to public health crises. We believe that the most effective way to provide access to healthcare delivery to a large footprint of our population is accelerated digital technology. We laud the thrust on digital health mission and various digital-first initiatives as we believe that these will help us leapfrog in providing access to healthcare to many more patients in India.
While the budget is in line to support the growth and recovery of the Indian economy while keeping the overall policy stability and fiscal discipline, we keenly anticipate an equal impetus on innovation and R&D. We all witnessed the acceleration in pharmaceutical innovation over the course of the pandemic. Policies attracting future investments in R&D and retaining world-class talent in the country is critical to make India aatmanirbhar.
Rolling out of National Digital Health Ecosystem is a positive step : Samir Mehta, Chairman, Torrent Group
The initiative of rolling out an open platform for the National Digital Health Ecosystem consisting of digital registries of health providers and health facilities, unique health identity and universal access to health facilities is a positive step towards prioritising the role of digitisation in the overall healthcare ecosystem. Launching the National Tele Mental Health programme under the expert guidance of NIMHANS as the nodal organisation is another extension of the digital health mission while improving the quality of life of citizens.
It is heartening that the budget identifies genomics and pharmaceuticals as ‘sunrise’ sectors: Vani Manja, MD, Boehringer Ingelheim India
It is heartening that the union budget 2022 identifies genomics and pharmaceuticals as ‘sunrise’ sectors. This would enable well-rounded development beyond employment and access to enhanced industry efficiencies and competitiveness, which will go a long way in attracting increased investments in biopharmaceutical innovation.
Our progress in research and development is inextricably linked to foster a culture of innovation. Allowing for additional provisions towards establishing a stronger IPR ecosystem in the country is imperative to improve the Ease of Doing Index in India and further propel FDI in the pharmaceutical sector.
The proposal to increase contribution towards the National Health Mission by Rs 2,853 crores reflects continued emphasis on access to quality healthcare. While the emphasis on digital investments is encouraging, an integral component would also need to include healthcare infrastructure and medical skill building at all levels.
The core framework of the budget was orchestrated around channelising infra-led economy growth : Raheel Shah, Director, BDR Group of Companies
The overall focus of the union budget seemed to be aimed at achieving inclusive development and productivity enhancement by providing stimuli to sectors which are fundamentally critical for the growth. The core framework of the budget was orchestrated around channelising infra-led economy growth, protecting macros of agriculture and inducing digitalisation. From a medical-industry perspective, strengthening of healthcare infrastructure, speedy vaccination programme implementation and nation-wide resilient response to the current wave of COVID-19 pandemic found prominent citations.
It is prudent to note that the country’s proactive focus on vaccination has enabled India today to emerge strong during the ongoing pandemic. What was a stand-out is the recognition of pandemic-infused mental stress. The launch of the National Tele Mental Health programme will be instrumental in addressing the post effects of COVID by enabling quality mental healthcare counselling and care services in the country. Additionally, an open platform for the National Digital Health Ecosystem will not only make the healthcare system more universal, but also enable the industry stakeholders, especially insurance players to gain prudence from accessibility to data from digit registries. Notably, two lakh Anganwadis are to be upgraded for improving child health, thereby, securing a larger base of the population which is yet to be vaccinated.
Reduction in GST rates for pharma would have been welcome : Sujay Shetty, Partner and Leader, Health Industries, PwC India
The thrust on creating digital health ecosystems will drive greater transparency and market access. A much-needed focus on mental healthcare and services through a network of telemental centres across the country will help drive quality care for an underserved area. The overhaul given to SEZs will benefit Indian pharma exports. Improving the logistics by creating a Unified Logistics Interface platform will reduce the supply chain bottlenecks. Tax benefit (15 per cent) given to companies looking at setting up manufacturing facilities in India extended by a year to 2023, which will help new pharma manufacturing units come up. With the whole Make in India and subsidies given to electronics, we can expect digital health [wearables] to get a boost. Where we wanted to see more was significantly higher impetus should have been given to R&D to propel India on the innovation curve. Reduction in GST rates for pharma also would have been welcome.
We shall wait for the right spirit in the implementation of all good plans in budget 2022 : Raktim Chattopadhyay, Founder and CEO, Esperer Nutrition
Healthcare and infrastructure were the major focus of the budget 2022 and significant investment has been allocated for the expansion of roadways and logistics networks which will definitely strengthen the nation. As we were expecting, start-ups were given keen importance in the budget. The ECLGS credit scheme guarantee cover has been expanded by Rs 50,000 crores, which will provide collateral-free loans to stressed-out MSMEs. The government has confirmed support for R&D expenditure, AI, genomics, etc. which is encouraging. We shall wait for the right spirit in the implementation of all good plans in budget 2022.
The planned increase in capital expenditure is likely to boost economic growth and employment: Sudarshan Jain, Secretary-General, IPA
This is India’s first post-vaccination budget, and the policy consistency is maintained. The planned increase in capital expenditure is likely to boost economic growth and employment. There is a thrust on macro areas like digital, VC-ecosystem, ease of doing business and supportive measures for R&D and industry-academia collaboration with pharma included in the sunrise sectors. The extension time limit for the commencement of business to claim benefits of concessional tax regime for manufacturing companies has been extended by a year to 31st March, 2024. This will support the investment in pharma manufacturing. Details are being examined and the implementation will be the key going forward.
Gati Shakti plan for expanding the National Highway Network by 25,000 kms in 2022-23 will boost logistics connectivity and improve last-mile deliveries: Vivek Chopra, Acting CEO, Cluster India and Indian Sub-Continent, DB Schenker
The government’s drive to encourage integrated logistics and multi-modal connectivity is a positive move towards the progress of the logistics industry in India. In terms of infrastructure, there is a notable change in transportation with the development of highways. The new proposed measures under the PM Gati Shakti plan for expanding the National Highway Network by 25,000 kms in 2022-23 will further boost logistics connectivity and improve last-mile deliveries. Additionally, the one-window platform for the exchange of data among all stakeholders will bring in more transparency and ensure ease of doing business for leading enterprises as well as Indian logistics startups, providing real-time information, enabling efficiency and reducing the overall logistics cost and time.
We are hopeful that the government impetus will improve India’s ability to access world-class medical cold chain products : Jesal Doshi, Deputy CEO, B Medical Systems
With India in the midst of a third wave of the pandemic, healthcare, including digital healthcare, and mental health has been a focus in budget 2022-23. The finance minister launched an open platform for the National Digital Health Ecosystem, which includes digital registries of health providers and facilitates a unique health identity, a consent framework, and universal access to health services. She also stated that 95 per cent of the 112 aspirational districts had made substantial progress in key sectors such as health, nutrition, infrastructure, etc, and that efforts would now be focussed on areas that were underperforming. We are hopeful that the government impetus will improve India’s ability to access world-class medical cold chain products while also improving India’s export competitiveness in this industry.
Digitisation of health registries of health providers and facilities will help the beneficiaries : Mahavir Bafna, CEO, Bafna Pharmaceuticals
Digitisation of the national health ecosystem is a welcome move announced in the budget. Digitisation of health registries of health providers and facilities will help the beneficiaries access to health facilities, especially in rural India. This will positively impact the pharmaceutical companies also, it being an integral part of the healthcare sector.
We continue to seek an enabling and supportive regulatory and policy framework : Sanjiv Navangul, Managing Director and CEO, Bharat Serums and Vaccines
Today, the booming biotech innovation across the globe, along with the accelerated adoption of digital technologies, has redefined the contours of healthcare management. To build and grow the research-driven biopharmaceutical industry in India, we continue to seek an enabling and supportive regulatory and policy framework that encourages and promotes research in order to bring positive patient outcomes.
Further, the union budget 2022 outlines ‘Genomics and Pharmaceuticals’ as the sunrise opportunities eligible for a supportive framework to build domestic capacities and promote Research and Development (R&D). This is encouraging as we collectively work towards building an Aatmanirbhar Bharat and an Amrit Kal for every citizen of the country.
We were expecting higher budget allocation due to the after-effects of the pandemic: V Ashok, Group CFO, ACG
The union budget for 2022-23 presented today will continue to accelerate economic growth through higher capital investment and lower inflation. Tax rates remaining unchanged despite likely challenges in fiscal targets is a positive move to drive consumption and money in the hands of consumers. January GST collection is an indicator of buoyancy in economic growth.
With respect to the pharma sector, we were expecting higher budget allocation due to the after-effects of the pandemic. India being the pharma capital of the world, looks forward to greater support, apart from the Production Linked Incentives (PLIs) announced.
Union budget 2022-2023 is focused on digitisation : Ashraf Biran, Founder and Director, Wellness Forever Medicare
The Production Linked Incentive (PLI) scheme for achieving Aatmanirbhar Bharat has received an excellent response. It is estimated to further create a boost for the healthcare industry. Union budget 2022-2023 is focused on digitisation with the introduction of the National Digital Health Ecosystem which will bring the entire network under one umbrella. This will help the healthcare providers with better access to the public and vice-versa. Retail pharmacies with the help of this move can shift their processes in a digitised format allowing better customer service and thereby paving the way for inter-linked businesses to merge. We are hoping that exemptions related to drug prices are announced in order to put the healthcare sector in the forefront.
There were expectations for more PLI-based schemes : Siddharth Shah, Director, Bharat Rubber Works
There were expectations for more PLI-based schemes but an increase in cargo and a boost in supply chain infrastructure were much needed which were heavily fractured during the pandemic. Also, it will boost in enhancing productivity. They will be key to sustain this momentum, thus accelerating sectoral growth and consolidating India’s position within the global pharma value chain.
It’s the right time to invest and increase production capacity for quantity and quality production.
Genomics and pharma are duly noted as sectors contributing to sustainable development: Shuchi Ray, Partner, Deloitte India
The importance of the pharma and healthcare industry, especially vaccination coverage and improved healthcare systems, has been well recognised and acknowledged. The vision of widespread use of technology by way of the National Digital Health Ecosystem, together with a focus on mental health of youth, reflects a progressive mindset towards the sector. Genomics and pharma are duly noted as sectors contributing to sustainable development, suggesting supportive government policies in future, including for R&D and blended finance for this sector. Extension of timelines to qualify for beneficial tax regimes should support innovation by startups and setting up of manufacturing and exports from India.