Union Budget 2020: For India to emerge as a promising market for generic drugs, there is a need for conducive policies around this industry.
By Amit Choudhary
Budget India 2020: The government had pushed for affordable and accessible healthcare in its last term, and we hope that this Union Budget for 2020-21 will also have some concrete action plans to realize this vision. Some of the important things to be noted about affordable and accessible healthcare solutions are:
- Innovative, tech-based, large-scale and affordable healthcare solutions are the need of the hour in India.
- Indian generics already account for 20% of global exports in terms of volume and this has further been growing at an impressive rate of around 24% per year for the last four years.
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For India to emerge as a promising market for generic drugs, there is a need for conducive policies around this industry. These are also aspects that we are trying to address through our work at Dawaa Dost and our expectations from Budget 2020-21 also revolve around this.
We hope the government will simplify regulations for pharmacies buying medicines from GST paid channels in Budget 2020. There should be 100% input credit for such entities and the working capital must be freed even under circumstances where the manufacturer or authorized distributor have erred on paying the deposit. The retailer has no recourse to anyone else nor the margins to absorb the entire GST as is the case today.
We also hope the government will consider offering income tax breaks to affordable medicine providers like Dawaa Dost in the Budget for 2020-21, as that will make them more accessible to the masses. The Union Budget 2020 can have specific provisions for the creation of a sunrise industry to provide income tax subsidies for hiring new talent from a PF contribution standpoint, accelerated depreciation on stores, and subsidy on technology development via grants. There is a huge opportunity in terms of building a new industry and the support of the government like it did to the IT sector two decades ago is the need of the hour.
Pharmacies are probably the most over-governed industry. We hope that for those players who have adopted a tech-oriented approach, the government, in Budget 2020, will consider offering a simple single-window audit and compliance. The pharmacy industry must also be defined as a priority sector and provided with access to subsidized loans and grants in the Union Budget for FY 2020-21.
(The author is the Founder and CEO of Dawaa Dost. Views expressed in the article are personal.)