Suresh Pareek, Managing Director, Ideal Cures
The implementation of various schemes and policies by the NDA government has brought about a lot of fresh changes in the way things worked within the country. Demonetisation, Swachh Bharat Abhiyan, Make in India and implementation of GST have been the key highlights of the NDA-led government. Demonetisation was an important step towards curbing black money. However, it caused a brief disruption to trade, business, small industries and workers.
We also saw introduction of the Benami Transactions (Prohibition) Amendment Act, 2016. It is believed that this Act, along with the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, will help the government in its fight against black money both within and outside the country. In totality, all sectors of governance saw some improvements and modernisation.
The NDA government changed orientation of earlier freebie culture, and has taken the right path in weeding out undesirable subsidy regime and implementing desirable ones with strong and effective administrative measure. ‘Give Up LPG Subsidy’ was one such campaign. These changes and improvements were also reflected within the pharmaceutical sector. India’s pharma sector is the sixth largest contributor to Foreign Direct Investment (FDI) in India. With an increase in the FDI up to 74 per cent in existing pharma companies, the existing government has invited a lot of foreign investments which eventually caused an increase in pharma exports. India’s pharma exports are estimated to be at $17.27 billion in 2017-18 and are expected to reach $20 billion dollars by 2020.
The ‘Make in India’ initiative also played a role in successfully inviting foreign investment, which introduced many measures that focussed on the ease of doing business in India. Digitalisation of various programmes and licensing with Digital India has also helped in streamlining processes and reducing processing times in various sectors.
Implementation of GST was a game-changing indirect tax reform which simplified the earlier indirect tax regime. After implementation of GST, the pharma sector saw a six per cent increase in the annual turnover in the period between May 2017 to May 2018. Few areas have been affected in a major way, for example, Sikkim was eligible to avail exemption from payment of Central Excise duty in terms of area-based exemption notifications. Under the GST law, a company is liable to reverse input tax credit on free samples. There have been investigations on free samples given in pharma, FMCG sector, food sector and retailers. However, later it was confirmed that samples which are supplied free of cost, without any consideration, do not qualify as supply under GST. Along with this, there have been regulations with respect to drug price control, ban on combination drugs and availability of essential drugs. Thus overall, for the pharma sector, past five years have been tough.
Government of India has taken various initiatives to promote the pharma sector. The approval time for new facilities has also been reduced to further boost investments. All government schemes and policies have collectively led to an increase in growth and development over the last five years. With the new government also we expect further fine tuning of the existing schemes and policies.
Ratings for schemes on a scale of 10
- Make In India – 8
- Digital India – 7
- GST Implementation – 7
- Drug Policy reform – 4
- Ayushman Bharat – 7
- Jan Aushadhi Kendras – 6