Ranjit Shahani, Vice Chairman and MD, Novartis India, and President, Organisation of Pharmaceutical Producers of India spoke to Business Today's Associated Editor E. Kumar Sharma on budget expectation:
Q.Given the current challenges, what, in your opinion, would make a good budget? What measures or proposals would you like to see?
A. In the decade that Prime Minister Manmohan Singh has called the decade for innovation in India, the budget should allocate funds and provide incentives to spur innovation across the board. There could be separate funds set aside, without any strings attached. A good starting point could be to provide funds for recommendations made by the Innovation Council under Sam Pitroda.
Q. Given the constraints the government faces in raising revenue, do you see a case to increase income tax rates on the rich? Please identify the cut-off in income beyond which you would classify the person as rich.
A. I only learnt recently that there are 81,000 people in India with more than Rs 25 crore wealth. This is not a huge number given India's size. Increasing tax on them may only end up encouraging some to transfer their wealth outside the country and trigger a flight of funds. A bigger thing would be to widen the tax net and get more people to pay taxes and check the parallel economy.
Q. If the budget does not meet expectations, do you fear that business sentiment would once again dip?
A. Yes, it will dip.
Q. Specific to your sector, what could the current budget do to improve conditions?
A. Eliminate the import duty on life-saving and life-extending imported drugs. Its share in revenues to the government is minuscule but the impact on the end consumer could be huge. Including all the duties, surcharges and other costs, typically they add up to around 26 per cent of the total cost, and therefore make the drugs that much costlier for the Indian consumer.
Q. Which budget, in the recent past, do you remember as having been a good one?
A. None really from the recent past.
Q. Do you expect a business-friendly budget?
A. No, not really. I fear, it may be populist.