Union Budget: Positive for health care

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Updated: March 1, 2015 12:37:10 AM

Finance minster has presented a good Budget, which is expected to spur India’s economic growth and global competitiveness...

Finance minster has presented a good Budget, which is expected to spur India’s economic growth and global competitiveness. The proposal to reduce the corporate tax from 30% to 25% over the next four years is a positive move that is expected to boost investment, stimulate growth and create more jobs.

Another welcome announcement is the decision to introduce GST from the beginning of next financial year, which is expected to make manufacturing in India more competitive. The infrastructure push and proposal for facilitating ‘ease of doing business’ are all encouraging announcements prima facie, but one has to analyse the recommendations in detail. In addition, the finance minister has provided a 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 finance minister has also announced a slew of tax measures and personal savings schemes aimed at benefitting the taxpayer and the common man. The proposal to work towards creating a universal social security system for all Indians, specially the poor and the under-privileged is a positive
announcement.

The Budget is encouraging for the health care industry in terms of extension of health cover and measures to boost health insurance. The increase in health insurance premium will enable people to seek out for quality health care which has been an area of concern in the country. The proposal to set up AIIMS in five new states along with additional National Institute of Pharmaceutical Education and Research and Institute of Science and Education Research are expected to address the shortage of doctors and skilled staff.

So, the Budget is definitely positive for the health care sector, but like some of the other preceding Budgets, this year too, there were no specific measures announced for the pharmaceutical sector. Pharmaceutical is a key sector that requires a major thrust from the government and should be given importance in the Budget as well.

Although, the finance minister has mentioned in his speech about fostering a culture of innovation, R&D and scientific research in India; unfortunately measures to encourage pharmaceutical research were not announced. Research-based pharmaceutical companies like us expected a host of measures like increasing the weighted tax deduction on R&D from the current 200%.

But the finance minister deserves full marks for presenting a well-balanced growth-oriented Budget. He has indeed laid down a good road map, but now it’s time to execute and deliver on the set objectives.

Glenn Saldanha, Chairman & MD, Glenmark

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