What about health?

The Budget sets a directional and aspirational agenda for the Indian economy. While reiterating the Modi Government’s intention to be industry- and investor-friendly, it delivers little by way of decisive action or bold reform.

Most disappointingly, the Budget fails to provide the pharma sector with much-needed incentives to build global leadership. It is most puzzling to see the withdrawal of service tax exemption on drug testing on clinical trials.

That said, the Budget does possess redeeming factors. The pronouncements on the retrospective tax issue, easing of FDI limits in defence and insurance, jobs creation in manufacturing and bringing back predictability in India’s tax regime will go a long way to improve the investment sentiment, as will measures to shift to e-governance, which is expected to improve efficiency and stem administrative leakages.

The Finance Minister also deserves to be commended for addressing the funding needs of small entrepreneurs. The ₹10,000 crore venture capital fund for startups, incubators and accelerators is a robust beginning.

Specifically for life sciences, I welcome the decision to scale up the biotech clusters in Faridabad, Mohali and Bangalore and bring them at par with the best globally, while also adding two new clusters in Kolkata and Pune.

I also see an intent to give a leg up to science in the decision to strengthen five Technical Research Centres of the Department of Science and Technology in the areas of nanotechnology, materials science and biomedical devices through public-private partnership and turn the Delhi-based International Centre for Genetic Engineering and Biotechnology into a world leader in life sciences.

For all this, my assessment, regrettably, is still that the Budget is high on good intentions with relatively few concrete measures on key issues. With reference to the Goods and Services Tax, it was time for a firm commitment with a final date for its implementation.

Consider the ‘Health for All’ agenda. Apart from a commitment to pursue the free drugs and diagnostics programme (announced by the previous government) on a “priority basis”, there is little else to suggest that the Budget has put India any further on its path to universal healthcare. Then, on the manufacturing front, even though the Finance Minister talks of reviving SEZs, there are no tangible measures.

It was well within the Finance Minister’s power to do more for the pharma and biotech sectors. One, waive the minimum alternate tax on pharma-biotech SEZs.

This would’ve considerably aided these units in competing globally. Two, include international patenting and overseas drug development expenses in the 200 per cent weighted tax deduction of research and development costs allowed to companies.

It could’ve also started putting the ₹500 crore R&D cess collected annually to its rightful use — to fund R&D — rather than letting it melt into the Consolidated Fund of India. The pharma industry has been at the receiving end of damaging policy decisions such as extensive price controls, and inordinate delays in permissions to market drugs or conduct drug trials.

The recommendations mentioned above would have given the sector a shot in the arm with hardly any loss of revenues to the exchequer.

The writer is the CMD of Biocon