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The Karnataka Drugs and Pharmaceutical Manufacturers Association (KDPMA) is of the view that though the Union Budget 2023 has provided ample clarity in its intention, it has still fallen short of the industry expectations. This is because there was no mention of the R&D weighted tax deduction and GST reduction for essential drugs from 12 per cent to 5 per cent.
While we laud the new pharma programme to promote research and innovation, there was a need to give the pharma industry a booster shot with relief in fiscal levies. The much-desired production linked incentive scheme for R&D and services was completely missed, said Harish K Jain, president, KDPMA, sr VP, FOPE and COA Member representing MSME, Pharmexcil.
Another demand of the pharma industry was to manufacture patented drugs which is currently imported and the government has ignored this too. In fact, it should consider production of patented medicines going by our scale of manufacture, presence of highest number of 615 US FDA plants outside of the US and vast number of audited units by other global regulators. India is the pharmacy of the world, third highest in terms of volume production, largest provider of generic medicines by volume, with a 20 per cent share of total global pharmaceutical exports and accounting for over 50 per cent of the global vaccine production, obviously manufacture of patented drugs can happen going by the pool of qualified personnel too, he added.
Since the intention of the government is to accelerate exports with its Make in India and PLI scheme, patented drug manufacture is only an arm’s length away, to enhance value addition and bolster our capability in domestic manufacturing. All multinational pharma along with the innovator and drug discovery companies now need to be encouraged to manufacture these in India, noted Jain.
Under the Vivad se Vishwas I – Relief for MSMEs , finance minister indicated that 95 per cent of the forfeited amount relating to the bid or performance security, will be returned by government and government undertakings to the MSMEs that could not execute the contract during the Covid. Now we also expect the state government to follow the same announcement, said Jain.
Giving considerable focus to compliances, to enhance ease of doing business, over 39,000 compliances are reduced and over 3,400 legal provisions have been decriminalized. Here the pharma industry is looking for a timeline to be announced by the government, said Jain.
On the whole, this Budget has created a pathway to a new beginning. The intent of the government is very clear to support the industry. Although pharma specific attention is only for R&D and innovation, still the industry can chalk out its next phase of growth, said Jain.
According to Jatish N Sheth, member managing committee, KDPMA, specific to MSMEs, revamping of the credit guarantee scheme which takes effect from April 1, 2023 through infusion of Rs. 9,000 crore in the corpus, should have been higher.
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