Pharma and Hospital Executives Push for Key Demands in Union Budget 2025

Increased investment in public healthcare, incentives for research and development, and tax breaks for additional life-saving medications are among the key demands of executives in the pharmaceutical and hospital sectors as they approach the forthcoming Union budget 2025.

Executives in the healthcare sector stated that broadening the range of lifesaving medications eligible for GST/import tax exemptions will aid in enhancing affordability for patients. They desire for all oncology drugs to receive the advantage. Hospital administrators called on the government to lower customs taxes on vital medical devices and supplies. In India, tax rates for essential medicines differ based on the category of medicines and if they are imported.

"Increasing public healthcare spending to at least 2.5% of GDP is crucial for strengthening our infrastructure and ensuring universal coverage," said Fortis Healthcare managing director and chief executive Ashutosh Raghuvanshi.

Organisation of Pharmaceutical Producers of India director-general Anil Matai called on the government to investigate ways to encourage R&D investments, including tax breaks on R&D costs, incentives linked to research for multinationals, and corporate tax reductions to hasten progress.

"Recognising the high-risk, long-gestation nature of R&D, we suggest extending the scope of Section 115BAB of the Income Tax Act, 1961 to companies solely engaged in pharmaceutical research and development and providing a 200% deduction rate on R&D expenditures," he said.

This part of the I-T Act permitted manufacturing companies registered on or after October 1, 2019, to choose a reduced corporate tax rate of 15%, as long as they commenced manufacturing activities by March 31, 2024.