The manufacturing and construction sectors recorded the strongest growth, while the weakest was agriculture, which showed growth of just 0.9%. This was aggravated by the poor monsoon this year. The inflationary trend, though, which was brought well under control during the year, has now started showing an ascending trend, especially in food prices. This is indeed a major cause of concern as food price inflation hits the poorest the hardest.
The pharmaceutical industry in India remained insulated from the global financial crisis, registering a growth rate of 14% during the year. India now accounts for 8% of global production and 2% of the world pharmaceutical market. In 2009-10, the finance minister brought the industry some relief with the abolition of the fringe-benefit tax and commodity transaction tax.
Simultaneously, the planned introduction of a goods & services tax and extension of provisions relating to weighted deduction of 150% on expenditure incurred on in-house R&D to all manufacturing businesses augur well for the industry.
Proposals for the improvement of healthcare infrastructure under the National Rural Health Mission and coverage of all below-poverty line families under the Rashtriya Swasthya Bima Yojana with an increase in allocation by 40% will help improve healthcare access to the common man.
The decision to cut basic customs duty on raw materials for lifesaving drugs, vaccines and medical devices, the total exemption of basic customs duty on influenza vaccine and nine other specified lifesaving drugs used for the treating breast cancer, hepatitis B, rheumatic arthritis, etc, and the tax incentives to set up and operate cold-chain facilities were welcomed by the industry.
In the larger frame, thoughin my viewthe following areas, if not addressed speedily, may throw up a tough challenge to the Indian economy in the near future:
* Rising prices, particularly food price inflation
* Low public spend on education and health
* Long overdue reform in labour laws
* Deterioration in balance of payments
* High levels of debt
* Large Budget deficit
* Delay in completion of various infrastructure and socio-economic projects, and
* Inequitable distribution of the economic growth.
Even though India has the highest levels of mortality and morbidity in the world, the 1% of GDP spent on healthcare is one of the lowest compared even with developing countries in Asia. The real challenge is not access to medicine, but access to healthcare. In India, we have the lowest-priced medicines, however delivery systems outside the cities just do not exist, denying over 65% of the population access to modern healthcare. That is the challenge.