Budget sops may trigger off biotech revolution

Fakir Chand in Bangalore

The Union Budget for 2002-03 may provide various incentives and tax benefits to trigger off a revolution in the nascent biotechnology industry.

Unlike in the case of its counterpart -- the information technology sector, which made rapid strides over the last decade without any supportive role by the government -- the biotech sector is too sensitive a field to be left to the industry and scientists for flourishing, feel experts.

In a bid to strike a balance between the vast natural and human resources available and the requirements of the nascent industry in terms of its benefits to the people at large, the biotechnology department of the ministry has drawn out an ambitious plan to facilitate its uniform growth in the country during this decade.

In light of the observations made in the 10th Five-Year Plan for the biotech sector, the department has urged Finance Minister Yashwant Sinha to incorporate them in his forthcoming budget proposals to offer tax sops and exemptions so as to enable entrepreneurs, universities, R&D institutes, and the industry to jointly collaborate in promoting biotechnology.

"Wait till the Budget day (February 28, 2002) to know what the government has in store for all the stakeholders in this exciting and promising industry," department of biotechnology secretary Manju Sharma told rediff.com in Bangalore on Tuesday.

Referring to the budget meeting the department and the ministry officials had with Sinha in New Delhi on Monday, Sharma said it would be presumptuous to spell out now the recommendations made for the Budget proposals as they are in the process of being finalised.

"There is a strong possibility that various tax benefits and concessions could be announced for the biotech sector so as to lure global biotech or pharma companies to set up research and production facilities in India, and woo venture capitalists to invest in the domestic market to promote joint ventures," Sharma stated.

Since there is synergy between IT and biotech, where the former can play a complimentary role in promoting bioinformatics for the global market, the Budget is also likely to have a plethora of incentives for those IT companies which foray into the segments related to developing software tools and applications for harmonising biotech data, genome sequencing, services, and security-related technologies.

Declining to go into specifics of benefits that the biotech sector may get, Sharma said that the industry had sought duty exemption on recombinant products so that they could be manufactured within the country in large volumes for mass consumption instead of importing them at high tariff levels.

"The department has also recommended lowering of tariffs with incentives on import of high-end research equipment and raw materials for processing and producing a host of biotech products that can be used extensively in agriculture as well as health sectors," Sharma said.

Sharma said that the onus of seizing the opportunities in the multi-billion dollar biotech sector lies on the industry.

"It is a different matter that the Indian software industry thrived on its own, riding on the plethora of sops extended by the government without exercising any role for itself. But in the case of biotech, which involves life sciences, biology, environment, patents, WTO, etc., the government has to be right in the centre of its activities, playing a pro-active role to facilitate the sector's growth and development," Sharma said.

Besides regulatory issues and guidelines, the Centre is also funding the setting up of biotech parks across the country on the lines of the Software Technology Parks of India for the IT or industry.

"Allocation of budgetary funds for research and product development in state-owned R&D institutes, centers of excellence, state/farm universities, IITs and the prestigious Indian Institute of Science in Bangalore, the Center will also be contributing its share in creating infrastructure facilities where ever required by the private industry."

Sharma is in Bangalore to co-chair a session on "The importance of investing technology funds to fuel the Indian economy", at a two-day international conference on Demystifying biotechnology - the value differentiators, organised by the Confederation of India Industry.