In sharp contrast to the high expectations of biotech industry from the finance minister, this year’s Budget has completely ignored the industry’s recommendations. There are no significant benefits for R&D, technology licensing and indigenous drugs. The only mention in respect of biotechnology was the accordance of the status of autonomous National Institute to the Rajiv Gandhi Centre for Biotechnology in Thiruvanathapuram, Kerala, says Avesthagen founder Villoo Morawala Patell.

“Perhaps, the FM ought to have saved this announcement for some other day, and instead, addressed the pressing needs of the biotech industry,” she adds.

A major demand was the extension of the weighted average deduction at 150% for

R&D expenditure till March 2015, which has not been addressed. With the advent of the WTO-TRIPS regime, R&D is the key for the future and survival of the bio-pharma Industry. If this incentive is not extended beyond 2007, the allocation of financial resources into R&D is likely to diminish resulting in India’s dependency on external innovation, says Mrs Patell.

Association of Biotechnology Led Enterprises (ABLE) representatives say there is a serious anomaly in taxation pertaining to patent filing, wherein weighted average tax deduction is only applicable to Indian patent filings. This is an enormous disincentive to Indian R&D.

The lack of incentives for R&D is seeing the flight of intellectual property from India to more tax-friendly regions of the world. “It is imperative that the government addresses this serious dilution of our intellectual capital through favourable taxation and fiscal mechanisms. The industry hopes that such oversights can be rectified during the course of this fiscal,” says Mrs Patell.

The biotech industry welcomed the proposal to reduce customs duty on anti-AIDS and anti-cancer drugs to 5%.

Free sample exclusion from FBT will benefit pharma companies. The move will make these drugs affordable and promote India as a major health destination.

Even the outlay for department of biotechnology has seen a marginal increase from Rs 389 crore to Rs 445 crore this year.

(www.financialexpress.com)