Govt Needs To Invest $5bn A Year In Biotech For Next 5 Years
BANGALORE: Ahead of the Budget, global consultancy firm PwC says government needs to invest up to $5 billion (around Rs 30,000 crore) each year for the next five years to enable biotech sector to become a $100 billion industry by 2025.
As part of the wish-list for the pharmaceutical sector in the upcoming Budget, the consultancy firm has also asked the government to allocate 500 crore each year from the R&D cess accessible by the Technology Development Board to stimulate the biotech sector.
"Make bio-manufacturing the next big opportunity after generics for India. Invest $4-5 billion each year in the next five years to grow the biotech industry to $100 billion by 2025," PwC India leader pharma & life sciences Sujay Shetty said in a statement.
The consultancy firm also proposed to the government to eliminate service tax for the domestic contract research organisations (CRO).
"Service tax for the CRO industry is putting Indian companies at a significant disadvantage over some of our neighbors and competitors. We request elimination or substantial reduction in the service tax, especially for overseas clients paying in foreign currency," Shetty said.
Further, the consultancy firm asked the government to encourage setting up of venture capital funds focused on investments in biotechnology.
"...All contributions by Indian corporate including pharma companies to SEBI registered biotechnology funds should be eligible for the weighted average tax deduction," Shetty said.
The consultancy firm also proposed to the government to give a tax holiday for a period of ten year for indigenously developed biopharma drugs.
Further, companies must be encouraged to start their manufacturing operations in India, it added.
"The current duty and tax structure acts as a deterrent for local manufacturing as customs duty on complete system is lower than the components for manufacturing and in addition the buyers have to spend additional central excise duty and sales tax on locally manufactured goods making it prohibitively expensive compared to imports," Shetty said.
It further proposed to the government to hike FDI in health insurance companies to 49 per cent.