**Story updated on January 30, 2023.
New Delhi: With the Union Budget 2023 just round the corner, the bioscience industry stakeholders have listed their expectations from the Union Finance Minister, Nirmala Sitharaman who is set to unveil the document on February 01, 2023. Whether it is biotech, healthcare or agriculture industry verticals, most of the industry leaders want the government to take a holistic approach to their demands.
Pharma and Biotech
As per Sudarshan Jain, Secretary General, Indian Pharmaceutical Alliance, “The Indian pharmaceutical industry is a sunrise sector for India, providing the world with affordable quality-assured medicines. It is a science-based and knowledge-driven industry, with scientific advances occurring at a rapid pace. The industry is around USD50bn today and aspires to grow to 120bn-130bn by 2030 and USD 450bn by 2047. To achieve this vision, the Union Budget 2023-2024 should help fuel innovation and R&D, which will set the pace for propelling the pharmaceutical industry forward.”
“The budget should outline supportive policies, simplified regulations, and simple GST norms to aid in the development of the pharmaceutical industry. Measures to facilitate the ease of doing business will increase investment and contribute to the industry’s long-term growth,” added Mr. Jain.
Vivek Sehgal, Director General, Organisation of Pharmaceutical Producers of India (OPPI) said, “Government needs to set in place R&D-focused incentives for the promotion of investment, which remains a constant and necessary ask of the sector. Government can consider providing Research Linked incentive schemes for companies making investments to undertake research for new drugs, new chemical entities, and/ or new biological entities (NBEs) to combat outbreaks and also explore providing a 200% weighted deduction for companies undertaking such R&D. Other considerations such as issuance of innovation Bonds similar to the existing NHAI and REC bonds which enjoy tax-free status and providing long pending clarification on the patent box regime to encourage Indian innovators who developed patents in India and derive benefits worldwide, would also be good initiatives.”
“Exemption to medicines supplied free of cost to patients is sought to be phased out by end of March 2023. It is expected that Government will reconsider the same and continue with an exemption for the import of said goods. Likewise, the exemption to goods used for R&D in the pharmaceutical sector and biotechnology sector should also be extended beyond 31 March 2023,” Mr. Sehgal added.
In his comments, Surajit Chakrabartty, Chief Financial Officer, MedGenome Labs said, “We now need to focus more on early diagnosis, prevention, and targeted treatment. Increased investments in R&D and healthcare technology will give the much-needed impetus to the country’s emergency care response infrastructure. With India being home to about one-third of all rare diseases, Genomics plays a major role in healthcare screening and management. Collaboration among industry and academia with policies and regulations will promote the right investment and research opportunities in this field.”
“Government led genome sequencing programmes and population wide genome sequencing initiatives in partnership with some of the private players will provide the right insights and help in better disease management. We look forward to the Government taking steps in this direction,” added Mr. Chakrabarty.
“The Indian Government realizes the potential of India’s API Industry and has recently given a thrust through the PLI scheme. The PLI scheme will add to India’s competitive advantage and reduce import dependence on key starting materials and APIs of Indian firms from Chinese manufacturers. The scope and quantum of PLI should be reviewed every year so that our manufacturing remains competitive. Overall, we expect more and more API manufacturers to avail this PLI benefit. The domestic API industry in India is looking for the government to take measures to support the growth and development of the industry, as well as to improve the ease of doing business for manufacturers,” said Manoj Mehrotra, President, Hikal Pharma.
Gaurav Srivastava, Co-Founder & COO, HaystackAnalytics said, “For Indian innovators, India will be a natural market for building acceptance and showcasing impact of the technology before global scale-up. High input cost will deter and delay the companies at the 1st leg itself. Being able to sell in India is already a phenomenal value proposition for any company as a price/impact combination that works in India will have a natural advantage in most of the world. For example, today genomics is its infancy in India. All reagents & capex that we use for sequencing are imported & have a ~ 30%+ net tax outflow making the input cost of these items higher than what our peers are paying in Singapore or Middle East. With zero GST under diagnostics for users this tax is a net increase in input costs. The opportunity is to rework the taxation of these products so that we reduce input cost and hence price for patients for genomics-based diagnostics. Reduced taxation on input + growth capital + customer access will bring to Indian innovators a huge scale which would bring the opportunity to Indianize supply chain for life sciences.”
“Creating precision PLI schemes for the industry will ensure India not just creates technology but also becomes a manufacturer and supplier for all life sciences supplies of the world. The progress we have made in Technology creation & R&D maturity achieved, and the opportunity in Life-sciences is now for India to lose. The stage is set for India to dominate the global market in Biotechnology and Life-sciences, a few measured steps in the right direction will ensure our dominance in the industry is cemented,” Srivastava added.
Sharing his comments, Dhananjay Singh, Head of Science and Lab Solutions, India, Merck Life Science said: “We are keenly looking forward to the impact of the Union Budget on the 2023–24 fiscal year. The budget is anticipated to help create the ecosystem to fuel innovation and research, built upon future capabilities that will propel the life science industry. Being the sunrise sector for India, the year 2023 holds a positive outlook for the life science industry. The need of the hour is increased collaboration between academia, industry, and the booming IT sector to utilize India’s technological capabilities and skilled workforce optimally. This collaboration will only help in research and development but also in translating those research findings into practical applications, which will further drive human progress.”
Mr. Singh added further, “It is a science-based and knowledge-driven industry, with scientific advances occurring at a rapid pace. With it, the demand for high-end innovation in the life sciences sector has increased too. To further accelerate innovations, biotech companies must make the best technological investments and attract the best talent. A collaboration between public and private bodies remains vital to make the biopharma and life science value chain as future-ready as possible. I hope the upcoming Union Budget becomes the initial step toward achieving that goal.”
Healthcare and HealthTech
Ms. Sangita Reddy, Joint Managing Director, Apollo Hospitals Group said, “Budget 2023 can provide a huge fillip to create the kind of healthcare ecosystem that will propel India to achieve global leadership. One major factor to drive the next phase of growth will be Public-private partnerships, especially in providing community-focused solutions for improved services.”
“Further incentivizing health-seeking behaviour by tweaking the tax slabs, reconsidering GST terms, promoting health infrastructure & exponential investments in research and development will immensely help in addressing concerns of both affordability and accessibility,” added Ms. Reddy.
“India is amongst the most preferred destinations globally for medical tourism and therefore, increased policy support is required to encourage, facilitate medical value travel to India, develop MVT as an organized sector. The sector needs lower cost financing through tax incentives for both existing and new healthcare projects. For new projects, the Government should provide tax holiday period of 15 years and for existing projects, tax relief for 10 years as re-investment support. Declaring healthcare as a National Priority Sector and classifying it on the same lines as Agriculture (priority-sector lending), will give banks the flexibility to lend to private healthcare institutions, on longer tenures, at lower rates,” said Dr Ashutosh Raghuvanshi, Senior Vice President, NATHEALTH and MD & CEO, Fortis Healthcare.
Listing his expectations from the budget 2023, Dr. Shravan Subramanyam, President, NATHEALTH said, “It is imperative to build infrastructural capabilities so that people have greater access to quality and critical healthcare services. Viability gap funding by the Government is essential to set up hospitals in tier-1 and tier-2 cities, encouraging increased investment in the healthcare infrastructure. Uniform adoption of Ayushman Bharat Digital Mission is another imperative which call for clearly defined delivery models for innovative modules developed by private players.”
“We are also witnessing a significant impact on cost of running business which will affect sustainability of MedTech organizations. If all payment backlogs both for providers and suppliers under insurance and public procurement are cleared, it would significantly improve the availability of healthcare infrastructure. As we prepare for the post-pandemic era, stable policy frameworks and incentives to help the healthcare sector remain viable- investment via FDI, expanding reach, investing in technology and innovation, reinforcing patient safety and adding to the skilled professionals of India,” added Dr Subramanyam.
“We are more than hopeful and positive that the government will act upon the request of the Indian Medical Device Industry for a Separate Department of Medical Devices. This key strategic need has also been recommended by the Parliamentary Committee on Health. AiMeD urges the government to consider shifting from an 8 Digit HS Code to a 10 Digit HS Code as done by USA and Europe to give more granular data for enabling better analysis and policy making, said Rajiv Nath, Forum Coordinator Association of Indian Medical Device Industry (AiMeD).
“Due to such low custom duty India is importing Rs. 63,200 Cr of Medical Devices and is over 80% Import Dependent. This 80% can be reduced to below 30% with correct policies as done for mobile phones and consumer electronics. Instead of 18% GST applicable on some Medical Devices that are not luxury goods, the GST needs to be a flat 12% for all Medical Devices. Also reducing GST to 5% is making Indian products non-competitive to imports as then manufacturers are unable to keep reduced Ex-Factory prices based on lower input costs net of GST,” added Mr. Nath.
As per Dr Alok Khullar, CEO, Gleneagles Global Health City, Chennai, the outbreak of Covid-19 has taught the healthcare sector some important lessons. “With the disruption caused to the healthcare sector during this period, we urge the government to give adequate importance to the healthcare sector in the upcoming Union Budget 2023 by considering special schemes that should be provided for formal training of doctors and nurses to enhance skills and bandwidth to offer care to a larger population which will help strengthen the quality of healthcare resources in the longer run.”
MTaI Chairman and Director General, Pavan Choudary said, “As per government data, nearly 80% of medical devices are imported into India to meet the rising demand for quality healthcare. Meanwhile, the custom duties and taxes levied on medical devices in India are one of the highest in the world and highest among the neighbouring countries which directly impacts patient affordability and is contradictory to what the government is trying to achieve. As the preparation for the Union Budget 2023 gets underway, we expect a correction on the same.”
“The MedTech industry expected more from the previous Union budget than it yielded. The sector requires more focus in government outlays to ensure organic growth of the industry and realize its true potential. One way to achieve this is by increasing the public health spending to meet the current gaps in healthcare demand and supply. A separate budget should also be allocated for the promotion and marketing of the medical device sector globally” added Mr. Choudary.
In her comments, Runam Mehta, CEO, HealthCube said, “In 2023, the focus should be on digital platforms and emerging technologies. The idea is to bring the best quality, affordable preventive healthcare to rural and semi-urban areas. Deeper and more sustainable public-private partnerships are essential here. These partnerships leverage the know-how and innovation from the private sector and the reach & distribution of the public sector to multiply impact. Although there has been a gradual increment in public investment in the healthcare sector, we expect the government to allocate more funds to these partnerships in the coming year.”
“It is imperative to support startups and entities making use of technology like digital therapeutics for the management of such conditions by offering tax exemptions. Apart from this, while there have been policies and incentives around traditional therapies like hospitals and OPDs, there is also a need to provide a GST offset to promote digital therapeutics and digital health. After all, healthcare cannot just be about curing, but also about taking care of one’s physical and mental health through outcome-based approaches, which will translate into better growth prospects for the country as a whole,” said Dr Arbinder Singal, Co-founder, and CEO, Fitterfly.
As per Vaibhav Tewari, Co-founder, and CEO, Portea Medical, the urgency towards improving the healthcare system that was witnessed during the onset of the pandemic is not as apparent now.
“While there is still considerable effort being made by stakeholders, there is a need for the government to expedite the formulation of several much-needed policies, guidelines, and directives for outside-of-hospital healthcare, diagnostic services, digital care platforms, etc. Bringing home healthcare under the coverage of universal health insurance will enable a larger number of people to avail of numerous benefits. It will also be good for the overall healthcare ecosystem as there will be fewer burdens of patients on hospitals.”
As per Krishna Veer Singh Co-Founder and CEO, Lissun, “Post-Covid, there is a clear focus on investing in the healthcare infrastructure of India. To achieve scale, it is clear that the digital part of healthcare needs direction and a boost. We hope the government allocates more funds to health tech, enabling a large population to be covered with minimal cost.”
“Especially on mental health, we are seeing mental health issues rising year over year. But last year, we saw a significant and welcome push by the government with the launch of a national tele-mental health program to provide 24×7 free counselling and care to people. On the insurance side, we also had a significant push to cover mental health diseases by IRDA. However, insurers in India seldom offer policies that cover non-hospitalization treatments or OPD reimbursements. It means that unless mentally ailing patients get hospitalized, they won’t be eligible for coverage. Insurance covers, thus, naturally exclude therapy and psychiatric counselling coverages. IRDA should push for OPD reimbursements for psychology therapy and counselling,” Mr Singh commented further.
“We expect the Government to lay down a more conducive environment for the growth of the MedTech industry by addressing the challenges in the forthcoming budget including catalyzing availability of a substantial supplier base for raw material. The Government should take measures to extend its support to reduce the cost burden on the manufacturers through initiatives such as providing concessional power tariffs, cheaper access to land for setting up manufacturing units. It must provide lower interest rates to manufacturers during the initial years of building the supplier ecosystem,” said Jatin Mahajan, Secretary – Association of Diagnostic Manufacturers of India (ADMI), Managing Director – J Mitra & Company.
“The Government’s procurement policy does not favour Indian manufacturers (no incentive during procurement for domestic companies). The Government is a significant buyer of medical devices in India with its medical colleges and public healthcare centres. However, public procurement policies for medical devices do not seem to provide preferential market access to locally manufactured devices. The procurements in most cases during the pandemic were more in favour of foreign-made products with questionable antecedents. There should be a systematic review of local capabilities and allowing exemptions only for products with insufficient local manufacturing capacity,” added Mr. Mahajan.
Agriculture and Agri-Technology
Speaking ahead of the budget, Vasu Naren, Director & CEO, Sona Machinery, said: “The economic forecast for 2023–24 is rather unpredictable, owing to the threat posed by climate change and the Russian invasion of Ukraine have led to a sharp spike in the cost of crude oil, food products, and wheat worldwide. To continue towards a stable course at this point, carefully considered actions to improve domestic sources of development would be essential. Along with actions to increase employment, capacity utilisation, and social infrastructure, measures to lower the cost of capital, electricity, logistics, land, and labour would be highly appreciated. Factory-level operations and increased revenues in the agricultural sector are essential for the expansion of private investments.
“”The Government of India has been actively encouraging the usage of ethanol-blended fuel across the nation as part of its efforts to transition to a sustainable energy future and to uphold its commitment to the Sustainable Development Goals (SDGs). It becomes equally important from the aspect of agriculture, as is evident from Government’s push to use Grains (as an alternate source) for the Production of Ethanol. Keeping this in mind, Union Budget 2023 must propose an extra differential excise charge on unblended fuel in order to promote fuel blending even further,” added Mr. Naren.
In his comments, Saket Dalmia, President, PHD Chamber of Commerce & Industry (PHDCCI), said “Further reforms in rural infrastructure logistics and a cold chain are required as it would help in increasing the level of food processing industry and rural entrepreneurship. These would lead to increased participation in the global agriculture and food exports. Exports of agri and food processing products should be increased to the level of US$ 100 billion in next three years from the current level of around US$ 50 billion (2021-22).”
“The increase in public investments in agricultural infrastructure would attract private investments in cold storage, warehousing and supply chain of agriculture produce in order to reduce food wastages and get them to urban citizens at moderate rates. It shall also raise the returns to agriculturists. It is essential that an integrated holistic view of the agriculture value chain is taken towards providing the necessary fillip to the agricultural growth. This requires a joint participatory approach from all concerned stakeholders including the farmers, input vendors, traders, processors and the government. The Union Budget can be very effective in laying down a comprehensive policy framework and providing a tremendous thrust through appropriate fiscal benefits and closely monitor the action plans,” added Mr Dalmia added further.
Sharing his expectations, Rajesh Aggarwal, Managing Director, Insecticides India Limited said, “Agriculture and its allied sectors are the largest sources of livelihood in the country. The upcoming budget should look forward to allocating funds on research and development activities to develop new more effective and safer solutions for control of pests, diseases and weeds for chemical and as well as biological streams. Different forms of incentive to the companies engaged in such R&D activities can be a motivating factor for them to invest more in the same. The government should also make budgetary allocations and develop more aggressive awareness missions for the new technology and new crop avenues, so that input cost can be reduced, and output value can be maximized. The budget needs to take this into account and provide higher allocation to horticulture.”
“Moreover, the industry needs more support from the government to maximize the agricultural output in 2023 in forms of incentives like PLIs. The agro-chemicals sector should see positive momentum coupled with banking as credit penetration for farmers continues to improve,” added Mr. Aggarwal.
“While the government needs to do its bit in rural farming across the nation, urban farming should also be considered to tackle the problems of air pollution, healthy and quality food availability, and sensitization towards bringing the urban population closer to agriculture. Separate budgets should be allocated for the promotion and implementation of urban farming on a larger scale. Government must devise some schemes to promote urban farming such as rooftop or balcony farms, community gardens, etc. This will not only help in reducing pollution but also in inculcating environment-friendly practices among the general public,” said Mr. Maninder Singh Founder & CEO, CEF Group.
In terms of renewable energy/biofuels, the government should encourage the infusion of better incentives in the SATAT policy at the central and state levels. Another important factor to consider in the upcoming budget must be CBG plants where finance should be made available for such plants and under specialized and specific government programs which include the Ministry of Oil and Gas, Ministry of New and Renewable Energy as well as the Ministry of Finance. The government should also provide ancillary support for marketing and selling of the byproducts from CBG plants and should also consider bringing these plants under the white category of environmental norms”, added Mr. Singh.
As per Sanjiv Kanwar, Managing Director, Yara South Asia, “We are enthusiastic about the opportunities and pathways that are opening up for engagement in the sustainability, food, and nutrition sectors as India assumes the G20 leadership this year. At Yara, we are hoping for a push toward simplifying regulations for introduction of innovative crop nutrition products, particularly micronutrients and speciality fertilisers. Nutrition will be critical to food security in India, given that we may take the title of the most populous country in the world this year. Therefore, we firmly believe that introducing the ‘Plant Nutrition Management Bill’ is necessary and ought to be a top priority for 2023.”
“Soil fertility and micronutrients will be critical to meet the quality requirements for the food being produced in the country. Hence, bringing parity between the taxation on bulk fertilizers and micronutrients will help farmers take advantage of these products to not only improve quantity, but also quality of produce. In fact, measures like direct benefit transfers of subsidy amounts into farmers’ bank accounts, will empower them to make a choice of products and services to be used to improve overall productivity for the farm sector. This step will also give wings to the export aspirations of the country,” added Mr. Kanwar.
**Story updated on January 30, 2023.
