Fearing burden on the people, the Union finance ministry has dropped the proposed 2 per cent health cess to collect Rs 6,000 crore (Rs 60 billion) for funding insurance schemes for below the poverty line families, secretary general, Indian Pharmaceutical Alliance, Dilip G Shah, said.
IPA, representing major national research-based pharmaceutical companies, had proposed introduction of a 2 per cent health cess for the poor to the department and chemicals and petrochemicals. The department and the health ministry accepted the proposal and forwarded it to the finance ministry, Shah told PTI on Tuesday.
The alliance, representing companies like Ranbaxy, Dr Reddy's and Lupin, works closely with the government on policy matters related to the pharmaceutical sector.
The alternative given was to raise resources from the General Budget. "The cess was meant to raise the additional resources. We have told the government if they do not want to do this, give the money from General Budget," he said.
"The cess was expected to give the Government Rs 6,000 crore. But the proposal has been shot down by the finance ministry and committee of secretaries as after reviewing the proposal they felt that with already education cess in operation, another cess was not required," Shah said.