All eyes will be on Finance Minister Nirmala Sitharaman as she presents the Union Budget for financial year 2021-22 in the Parliament on February 1. With the government's revenue hit by the pandemic and fiscal deficit expected to rise, the finance minister will have to do a delicate balancing job.
The pharma sector is among those sectors which would have big expectations from the Budget. The sector was in focus in 2020 as the COVID-19 pandemic ravaged lives and economies across the world. It rose up to the challenge, with two indigenous vaccines being approved by the Drug Controller of India, earlier this month, for the fight against the pandemic.
Continuing the focus on 'Atmanirbhar Bharat', the sector would look towards the government to take further steps to boost self-reliance. The pandemic made the world realise the huge dependence on China for supply chain, and India can emerge as a reliable alternative for the sector with the help of enabling government policies.
There is also a need to reduce the dependency on imports for active pharmaceutical ingredients (APIs) and key starting materials (KSMs), especially from China. The government has already announced production linked incentive (PLI) scheme for bulk drugs and medical devices and to boost domestic manufacturing of APIs, KSMs and drug intermediaries. However, the sector will look towards second phase of the PLI schemes with less strict conditions.
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Besides, it will look for further incentives to boost research and development (R&D) and innovations. It is also looking for the Centre to increase its spending on healthcare from about 1.5 per cent of GDP. A focus on preventive health check-ups is also being expected. Besides, a clarity on if the government will bear the cost of COVID-19 vaccination for the entire population will be keenly watched.
"With regard to Indian pharma and healthcare, despite the challenges, the industry has performed relatively well. To give the necessary fillip to the sector, we expect the government to form enabling policies that will empower the industry to establish India as the pharmaceutical hub for the world," said Nikhil Chopra, CEO and whole time director of J.B Chemicals & Pharmaceuticals.
"While the budget should continue to ensure wider implementation of schemes like Ayushman Bharat, as against the marginal increase in budget allocation for healthcare every year, the budget this year should put health on top priority and increase spends on public health substantially from previous years," Chopra added.