Budget 2016: The finance minister has presented a growth-oriented Budget amid concerns over stagnating growth and global economic crisis. He needs to be applauded for his long term focus and commitment for achieving inclusive growth. Infrastructure and agriculture has undoubtedly been given special thrust, which will help in employment generation and boost the economy in the long run. In addition, the finance minister has provided strong impetus to inclusive growth by significantly investing in the long-term drivers of the economy such as education, skill development and growth of the rural economy. The renewed thrust on rural economy, irrigation and women empowerment; along with focus on rural infrastructure, village electrification and skill development in the Budget will have a significant impact on rural India.
Some other positives were – no increase in the services tax, which was speculated to rise by 2%, and no change in capital gains tax. The ‘Make in India’ initiative has also been given a fillip through incentives for new manufacturing firms and relatively small enterprise firms.
A move that has come as a slight dampener for research driven companies like ours is the reduction of benefit of deduction for research to 150% from April 2017 and 100 % from April 2020. This reduction has come without the corresponding Corporate Tax rate being decreased. The government’s support for innovation R&D is required in the form of tax incentives, regulations and grants for various research projects in sectors like pharmaceuticals.
Like in the preceding years, the budget did not announce anything specific for the pharmaceutical sector; although there were a couple of positives for the healthcare sector. Measures like providing of health insurance of up to Rs 1 lakh per family and the opening of 35,000 medical stores under Pradhan Mantri Jan Aushadhi Yojana are welcome moves for making medical treatment accessible and affordable for the poorer sections of society.