#Budget2017: Industry praises new measures, expected more!

The Finance Minister, Mr Arun Jaitley in the budget 2017-18 presented on 1st February, has clearly focused on the rural healthcare and agriculture. While a few new favorable announcements have been made, the wider expectations of the industry remain unfulfilled

The Union Minister for Finance and Corporate Affairs, Mr Arun Jaitley departs from North Block to Rashtrapati Bhavan and Parliament House, along with the Minister of State for Finance and Corporate Affairs, Mr Arjun Ram Meghwal and the Minister of State for Finance, Mr Santosh Kumar Gangwar to present the General Budget 2017-18, in New Delhi on February 01, 2017.

New Delhi: The 2017 Union Budget, presented by the Union Minister for Finance and Corporate Affairs, Mr Arun Jaitley, was broadly focused on the farming sector, rural population, underprivileged healthcare, infrastructure, the financial sector for stronger institutions, speedy accountability and tax administration for the honest.

The Finance Minister mentioned that government has prepared an action plan to eliminate Kala-Azar and Filariasis by 2017, Leprosy by 2018 and Measles by 2020. Elimination of tuberculosis by 2025 is also targeted. Similarly, action plan has been prepared to reduce IMR from 39 in 2014 to 28 by 2019 and MMR from 167 in 2011-13 to 100 by 2018-2020. 1.5 lakh Health Sub Centres will be transformed into Health and Wellness Centres.

Mr Jaitley said that to strengthen secondary and tertiary levels of healthcare, adequate availability of specialist doctors is needed. “We have therefore decided to take steps to create additional 5,000 Post Graduate seats per annum. In addition, steps will be taken to roll-out DNB courses in big District Hospitals; strengthen PG teaching in select ESI and Municipal Corporation Hospitals; and encourage reputed Private Hospitals to start DNB courses. The Central Government will work with the State Governments to take these tasks forward. The Government is committed to take necessary steps for structural transformation of the Regulatory framework of Medical Education and Practice in India. Two new All India Institutes of Medical Sciences (AIIMS) will be set-up in the States of Jharkhand and Gujarat.”

The Budget also proposed to amend the Drugs and Cosmetics Rules to ensure availability of drugs at reasonable prices and promote use of generic medicines. New rules for regulating medical devices will also be formulated. These rules will be internationally harmonised and attract investment into this sector. This will reduce the cost of such devices.

Agriculture and Allied sectors will get about one lakh 87 thousand crore in the budget, 24% higher than the previous year. The Finance Minister said that the Government has proposed to increase the allocations for Deendayal Antyodaya Yojana- National Rural Livelihood Mission for promotion of skill development and livelihood opportunities for people in rural areas to Rs 4,500 crore in 2017-18. The allocation for Prime Minister’s Employment Generation Programme (PMEGP) and Credit Support Schemes has been increased more than 3 times. The Finance Minister informed the members that the Swachh Bharat Mission (Gramin) has made tremendous progress in promoting safe sanitation and ending open defecation. Sanitation coverage in rural India has gone up from 42% in October 2014 to about 60% and such villages are now being given priority for piped water supply. He said, for imparting new skills to the people in the rural areas, mason training will be provided to 5 lakh persons by 2022, with an immediate target of training at least 20,000 persons by 2017-18.

In a bid to incentivize domestic value addition under Make in India initiative of the Government, the Finance Minister has proposed to reduce Customs and Excise duties on several items related to the Renewable Energy Sector. This includes all items of machinery required for – fuel based power generating system to be set up in the country for demonstration purposes; systems operating on biogas/ biomethane/ byproduct Hydrogen; LED lights or fixtures etc.

Industry reactions

Dr Shivendra Bajaj, Executive Director, Association of Biotechnology Led Enterprises- Agriculture Focused Group while commenting on the budget mentioned, “Finance Minister Arun Jaitley’s 2017 budget is strongly focused on providing an impetus to rural India – from farmer welfare to improving opportunities for youth. However, the prospect of improved agri-growth of 4.1% as highlighted by the Finance Minister as always remains dependant on the prospect of good monsoons.” He added, “While improving access to farm credit, increasing farm insurance and creating a law on contract farming is always welcome, however we see no provisions for the improvement of the seeds sector or budgetary provisions to encourage indigenous innovation in the sector to mitigate the impact of climate change and drought. It would have been good if the government had taken a more holistic look at the farm sector and link it with initiatives aimed at India’s numerous agriculture colleges and the agri-biotechnology sector.”

Mr Raju Barwale, Managing Director, Maharashtra Hybrid Seeds Company Private Limited (MAHYCO) feels that the budget is progressive. He elaborated, “A large budgetary allocation of  Rs 1.87 lakh crore to agriculture and rural sector, at an increase of 24% over the last year reflects continued commitment to the progress of farmers. The mission to double farmers’ income is reiterated with initiatives such as increased impetus to soil testing, irrigation fund with NABARD, strengthening of Fasal Bima Yojana and the e-NAM scheme.

Yet also says that the seed industry hasn’t got its due. “We find amiss that the seed sector has been not been given its due attention in the Budget. Seed Innovations need to be encouraged and promoted in the sector as seeds are and would continue to be a critical part of the strategy to double farmers’ income through improved agricultural productivity. We trust that there would be increased policy support for Research and Innovation in Seeds soon,” said Mr Barwale.

“It is reassuring that the revision of the Drugs & Cosmetics Act and the Medical Devices Rules have found a mention in the Budget. We hope, however, these revisions will be implemented at the soonest and that a strong patient-centric regulatory system is soon in place towards the end objective of ensuring more accessible and affordable drugs and devices for our population and better healthcare for all. A more predictable regulatory environment will also create greater confidence amongst global stakeholders in doing business in India.  It is also heartening to note of the Government’s resolve to make India disease free of some endemic diseases that affect a large cross section of our population as we need focused programmes to reduce our growing diseases burden. I do wish however more focus was given to innovation and R&D in the life sciences industry, to further encourage local drug and device development to meet our unique disease profile.” Naz Haji, SVP & Managing Director, R&D Solutions, QuintilesIMS India

Mr Rajiv Nath, Forum Coordinator, Association of Indian Medical Device Industry (AiMeD) in his post budget comments stated, “It is heartening to note the commitment from the Finance Minister in this budget regarding ‘regulations for medical devices in the country.’ However, the statement is too open-ended and the fine print notification spelled out does not seemingly have any details on duty changes etc. He added further, “We do hope the coming road map will be in sync with the Government’s larger commitment of ‘Make in India’ i.e to develop manufacturing eco-system for the medical devices in the country, boosting domestic industry while ensuring the healthcare security of the nation which implies that cost of medical devices need to be lowered.”

As per Mr Pavan Choudary, Director General, Medical Technology Association of India (MTaI),”The FM’s acknowledgement that the Medical Device rules will be globally harmonised and that this would facilitate investments in this sector is a reflection of the growing understanding of the international interconnectedness of this sector and the importance of global technology & investment infusion.”

Dr Dharminder Nagar, MD, Paras Healthcare feels that the budget has been good for healthcare, He says, “The most notable announcement on the healthcare front in the Budget has been that of two new AIIMS for Jharkhand and Gujarat. Given the need for expanding the reach of public healthcare, we need an AIIMS in every state. This will also help enhance medical education in the country. So, this is a welcome step and we hope it is taken up on priority by the Ministry of Health. Another important element is the pledge to eliminate tuberculosis by 2020. India has the highest burden of tuberculosis, a disease which has been successfully eliminated from a large part of the world. While 2020 seems an ambitious target, it is a highly imperative one for our country.”

While analyzing the budget in the critical way, Mr Piruz Khambatta, Chairman, CII-National Committee on Food Processing, mentioned, “After the big earth quake of demonetization drive budget was expected to be tsunami of reforms especially to boost  private sector investments, manufacturing and job creation, but unfortunately this has not happened and those big bang reforms which were expected have not come in. This would not help overall private investments and job creation. More importantly exports which have been stagnant for many years will also not get any major boost in this budget.

What’s there for farming and agriculture?

  1. Sowing farmers should feel secure against natural calamities.
  2. A sum of Rs 10 lakh crore is allocated as credit to farmers, with 60 days interest waiver.
  3. NABARD fund will be increased to Rs. 40,000 crore.
  4. Government will set up mini labs in Krishi Vigyan Kendras for soil testing.
  5. A dedicated micro irrigation fund will be set up for NABARD with Rs 5,000 crore initial corpus.
  6. Irrigation corpus increased from Rs 20,000 crore to Rs 40,000 crore.
  7. Dairy processing infrastructure fund wlll be initially created with a corpus of Rs. 2000 crore.
  8. Issuance of soil cards has gained momentum.
  9. A model law on contract farming will be prepared and shared with the States.

The focus on healthcare especially aimed at the rural population was clearly visible in the budget. Few of the highlights:

  1. Elimination of tuberculosis by 2025 targeted.
  2. Health sub centres, numbering 1.5 lakh, willl be transformed into health wellness centres.
  3. Two AIIMS will be set up in Jharkhand and Gujarat.
  4. Will undertake structural transformation of the regulator framework for medical education.
  5. Aadhaar-based smartcards will be issued to senior citizens to monitor health.