The pharmaceuticals industry has almost unanimously welcomed the 2009-2010 budget, but with some reservations. While the industry is happy with continuation of excise duty at 4 per cent, some said they had expected more concessions.

OPPI director-general Tapan Ray said that the reduction of customs duty for drugs used for heart diseases, influenza vaccine, breast cancer, hepatitis B, rheumatic arthritis and also for bulk drugs used for the manufacture of such drugs from 10 to 5 per cent and total exemption of excise and countervailing duty for these drugs will help rediue transaction costs on these medicines.

Extension of the scope of current weighted deduction of 150 per cent on expenditure incurred on in-house R&D to all manufacturing businesses except for a small negative list is another welcome step.

The budget proposal of covering all BPL families under Rashtriya Swasthya Bima Yojana with a 40 per cent increase in allocation wiould help improve healthcare access, Ray said, adding that the abolition of FBT and extension of tax holidays for exporters upto 2011 will benefit the industry.

Welcoming the budget, IDMA Gujarat state board chairman Kamlesh Patel said that the pharma companies are very happy with the budget as there is no change in the excise duty. Consumers will get the medicines at the same cost as the change in excise duty is directly related to the cost borne by the consumers, he said.

Thanking finance minister for retaining the excise duty at 4 per cent for pharma sector, SPIC secretary general Jagdeep Singh said that this was important in view of the fact that anomalies of MRP excise levied in January 2005 had increased the excise burden manifold, consequently magnifying the disparity between the excise free zones and the rest of the country.