Budget 2018: While the finance minister has presented a moderate Budget, he continues to emphasise on overall infrastructure development and strengthening of the rural economy. The increased focus on healthcare augurs well for the citizens of the country. This year’s Budget aimed to spend more on rural housing, rural roads and rural infra, which will lead to employment generation and boost the economy in the long run. This year, finance minister Arun Jaitley has given record allocation in this Budget to bring more roads, railways, electricity and sanitation to rural India. To address the health issues holistically, the government also announced a corpus of Rs 1,200 crore; and around 1.5 lakh health centres will be introduced.
In addition, the finance minister has provided a strong push 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. On the other hand, there is reduction in corporate tax rate to 25% for small companies with an annual turnover of up to Rs 250 crore to make them competitive in the global market.
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Like in the preceding years, the Budget did not announce anything specific for the pharmaceutical sector and there are no significant changes or announcements that were expected. Pharma companies are facing several challenges across geographies and, to stay competitive in the overseas market and to make the transition from pure-play generic players to branded pharma firms, fiscal incentives could provide the necessary fillip, especially in the areas of drug discovery and innovation. However, this year as well, incentives for innovative R&D were not recognised. There were very few positives for the healthcare sector, like the much-needed health cover for the middle-income group and setting up 24 new medical colleges across the country, which will provide healthcare to people and education opportunities to students.
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Also, there are some benefits for senior citizens with an increase in the pension scheme and higher deduction for the medical insurance premium. Over the long term, initiatives like the launch of the flagship National Health Protection Scheme and Ayushman Bharat Programme, a universal health coverage, will lead to an increase in healthcare expenditures and improve healthcare infrastructure, which will be overall positive for the growth of the sector. Overall, the Budget was as per expectations.
Glenn Saldanha Chairman & MD, Glenmark Pharmaceuticals