Union Budget 2016: Pharma companies to benefit in 2016-17 fiscal year

This move of tax rebate announced in Union Budget 2016 may help pharma giant like Sun Pharma, Dr Reddy's, Wockhardt, Lupin and Cipla who are expanding their global business through new patents.

Mumbai, February 29: Large Indian and global pharma companies are set to benefit from the Union Budget 2016 which has been tabled today by Finance Minister Arun Jaitley. The FM today announced for a 10 per cent tax rebate on earnings from global medicines patent filings.

This move of tax rebate may help pharma giant like Sun Pharma, Dr Reddy’s, Wockhardt, Lupin and Cipla who are expanding their global business through new patents.

Jaitley in his budget speech at the Lok Sabha said, “I propose a special patent regime with 10 per cent rate of tax on income from worldwide exploitation of patents developed and registered in India”.

Habil Khorakiwala, Chairman of Wockhardt lauded the step noting it will boost innovation and manufacturing in India in next few years. After the proposal was tabled by FM Jaitley the BSE’s Healthcare index was marginally up by 0.21 per cent at 15204. Read Also: (Budget 2016: Arun Jaitley gives final touch to Budget, meet the team that designed it) 

Meanwhile domestic pharmaceutical manufacturers, especially small and medium enterprises were ignored by FM Jaitley. Earlier around 8,000 pharma SMEs had requested for soft loan of 5% interest rate with a two-year holiday period and seven-year of repayment period.

The Government now needs to act hard on the healthcare sector which is in urgent need of funds to improve their infrastructure and skills set to increase positive results. Also availability of cheap medicine will help the pharma industry to launch new drugs and explore the market while expanding the existing ones. Experts believe that the issues of the Pharma industry is ignored almost in every budget.