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March 1, 2000
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Pharmaceuticals
Overall impact: Neutral
Positive features
- Proposed ugradation of patents and trademark office with a sanctioned budget of Rs 750 million.
- Reduction of peak customs duty from 40 per cent to 35 per cent.
- Increase in plan allocation to promote Indian systems of medicines and homeopathy.
- Healthcare infrastructure to be enhanced.
- Increase in FII investment limit from 30 per cent to 40 per cent.
Negative features
- Levy of excise on medicines to be on Maximum Retail Price (MRP). This will raise prices thus adversely impacting companies with large presence in the Over the Counter (OTC) segment. .
- Generic medicines have been brought on par with branded medicines with excise duty being raised to 16 per cent from 8 per cent. This will hurt the small scale sector.
- Certain pharmaceutical companies are known to pay high dividends. Such companies will have to pay higher dividend tax.
- The industry had several expectations pertaining to research and development expenditure. These have remained unfulfilled.
- The pharmaceutical sector has traditionally been a large exporter. Exporting companies will be adversely affected by the phasing out of export benefits over a five-year period.
ALSO SEE:
BUDGET IMPACT
The first cut
A matter of life and debt
On the MAT
How will your tax outgo change?
SECTOR IMPACT:
PRELUDE TO THE BUDGET
What will Yashwant Sinha do?
How will personal taxes change?
Fiscal report card
PRE-BUDGET SECTOR ANALYSIS:
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