“There were some key highlights in this year’s Budget for the Pharma and Healthcare Industry.
On the positive front, the government health expenditure has shown an increase from 1.40% of GDP in FY 19 to 2.1% of GDP in FY 23 viz a budget plan of Rs 88,956 crore for FY 23-24. To boost R&D and innovation the Government announced a new pharma program to be undertaken through centres of excellence. Further facilities in select ICMR labs will be made available for research by public and private medical faculties and private R&D teams for collaborative research. These are steps in the right direction.
Other initiatives announced in the budget which could help the Healthcare industry include a plan to have three Centres for excellence of Artificial Intelligence for health, agriculture, and sustainable system to foster partnership of industry players in conducting research and develop cutting edge applications. Also 157 nursing colleges are to be set up in the existing medical colleges to boost the much-needed manpower for the healthcare sector.
Further, current customs exemption for specified products are extended for lifesaving drugs and specified drugs, medicines, diagnostic kits by two years up to 31 March 2025 and for Specified drugs and medicines supplied free of cost to patients under Patient Assistance Program, specified medical and surgical instruments, hospital equipments up to 31 March 2024.
Having said that, the much-hoped income tax benefit in the form of higher R&D linked weighted deductions or simplification of the patent box regime were not considered. Also missed was extending customs exemption for goods used in pharma sector for R&D beyond 31 March 2023.”
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