Budget 2022: Will it impact ‘Gati’ of pharmaceutical industry?

-

COVID-19 pandemic has posed unprecedented challenges for the world economy. The Indian pharmaceutical industry, which ranks third in the world in terms of production by volume, has emerged as a key player in providing the much-needed support and impetus to the healthcare system and the economy.

The Government of India (GoI) has been equally proactive in recognising the need to boost and support the healthcare and life sciences sector at large.

Recently, the GoI released the Economic Survey 2021-22. The Economic Survey considered the existing circumstances which demonstrate volatility, uncertainty, complexity and unambiguity. Therefore, the central theme of ‘agile’ approach was adopted in contrast to the pre-determined ‘waterfall’ approach.

The Economic Survey suggested that the overall health of the economy has reached pre-pandemic levels. Particularly for the pharmaceutical industry, the Economic Survey indicated extraordinary growth of Foreign Direct Investment (FDI) during 2020-21 mainly on account of investments to meet COVID-19 related demands for therapeutics and vaccines.

Below are a few noteworthy initiatives by the GoI in the recent past for the pharmaceutical industry:

  • Production Linked Incentive (‘PLI’) scheme for pharmaceuticals sector approved on 24 March 2021 with a total financial outlay of Rs 15,000 crores.
  • To reduce import dependence on bulk drugs (varying from 80-100 percent in certain cases), one of the measures introduced is the PLI scheme for bulk drugs with a budget of Rs 6,940 crores for 8 years.
  • Scheme for promotion of bulk drug parks envisaging the creation of world-class infrastructure facilities to make the Indian bulk drug industry a global leader approved on 20 March 2020.
  • PM Gati Shakti, an integrated plan ensuring multi-modal and seamless connectivity for people goods and services, was introduced. Through the development of economic zones like pharmaceutical clusters, Gati Shakti will improve connectivity thereby making Indian businesses more competitive.

With the hope that a ‘once-in-a-century’ pandemic will soon be behind us, the finance minister presented the second Union Budget in digital form which lays down a plethora of initiatives to move the economy forward. While the Union Budget focused on the growth agenda, the central theme revolved around capital expenditure, infrastructure development, augmenting the digital ecosystem and promoting ease of doing business.

Certain amendments in the Union Budget which may be of relevance to the pharmaceutical industry are:

  • Introduction of National Digital Health Ecosystem, an open platform consisting of digital registries of health providers and health facilities, unique health identity, consent framework and universal access to health facilities
  • Launch of National Tele Mental Health Programme with 23 tele-mental health centres of excellence for better access to quality mental health counselling and care services.
  • Extending the time limit for commencement of manufacturing or production to avail concessional 15 percent tax regime for new manufacturing facilities to March 31, 2024.
  • Non-taxability in recipient’s hands of the sum received to be spent on COVID-19 related illness and receipt of funds by a family from an employer or any person on death of individual subject to conditions prescribed.
  • Provide sunrise opportunities to pharmaceutical companies to assist sustainable development at scale. For R&D in these sunrise opportunities, in addition to efforts of collaboration among academia, industry and public institutions, government contribution will be provided.

While the above coupled with certain other amendments to reduce litigation may be viewed favourably, certain proposed amendments like allowability of business expenses (subject to conditions) and introduction of the new provision for deduction of tax on the benefit of perquisite in respect of business or profession, may require discussion with relevant stakeholders for smooth implementation.

While India’s estimated economic growth is pegged at 9.2 percent, the effective capital expenditure of Rs 10.68 lakh crores in 2022-23 is approximately 4.1 percent of Gross Domestic Product (GDP), and seems to be receiving a positive response from investors and markets.

Given the policy-related initiatives like the PLI scheme, tele mental health programme, etc., there is a bright road ahead for the Indian pharmaceutical industry. With price competitiveness and good quality medicines coupled with infrastructure and policy-level initiatives, the industry is well-advancing towards being dominant players of the world and strengthening India’s image as ‘pharmacy of the world’.

Ashish Jain is Partner, EY India; Manthan Shah – Manager, Tax & Regulatory Services, EY India also contributed to this article. Views are personal.

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.



from Firstpost India Latest News https://ift.tt/EqcZmkXW4
Ashish Jain

Comments

Post a Comment

Popular posts from this blog

Both COVID-19 vaccine doses needed for good protection against B16172 variant

-
It’s been a concerning few weeks in the UK, with the B16172 variant first taking hold and then spreading to become dominant. This more infectious form of the virus, initially identified in India, is what we’re now going to have to live with – unless it is out-competed by another variant in the future. Worryingly, experts had predicted that B16172 might be able to escape some of the effects of vaccines, which if true would threaten to derail the UK’s plans to finish lifting restrictions from the end of June. However, Public Health England (PHE) has looked at the ability of various variants to evade immunity and says that the UK’s vaccines remain effective against the variants circulating, including B16172. On the surface, this looks like good news. But delve a bit deeper, and things get more complicated, says Paul Hunter, professor of medicine at the University of East Anglia. PHE’s research found a little drop-off in protection against B16172 among people who were fully vaccinated.
Read more

New coronavirus variant emerge in India: How should our COVID response change?

-
Image
After genome sequencing of over 10,000 COVID-19 cases in India, researchers have discovered a new variant with two new mutations which may be better at evading the immune system. In 15-20 percent of samples from the Indian state of Maharashtra (the state accounting for 62 percent of cases in the country) a new, double mutation in key areas of the virus has been detected. These are now known as the E484Q and L452R mutations. What makes the variant different? Both these mutations are concerning because they are located in a key portion of the virus – the spike protein – that it uses to penetrate human cells. Spike proteins attach via a “receptor binding domain”, meaning the virus can attach to receptors in our cells. These new mutations include changes to the spike protein that make it a “better fit” for human cells. This means the virus can gain entry more easily and multiply faster. Given what we have seen with other similar mutations , it might also make it harder for our immu
Read more

Aditya L1 Mission: Spacecraft is nearing its final phase, says ISRO chief

-
Aditya L1 spacecraft is nearing its final phase, and manoeuvres to enter the L1 point are expected to be completed by January 7, 2024, according to ISRO Chairman S Somanath. “Aditya is on the way. I think it has reached almost its final phase,” the ISRO chief told PTI on the sidelines of an event organised at VSSC to commemorate the 60th year of the First Sounding Rocket Launch. Aditya L1, India’s first space-based mission to study the Sun, was successfully launched on September 2 from the Satish Dhawan Space Centre (SDSC) in Sriharikota. The spacecraft, after travelling about 1.5 million km from Earth over 125 days, is expected to be placed in a Halo orbit around the Lagrangian point L1, considered closest to the Sun. He said that the last preparations for the spacecraft’s entry into the L1 point are currently underway incrementally.”Possibly by January 7th, the final manoeuvres will be done for entering into the L1 point,” Somanath added. Among other tasks, it will capture and tr
Read more