New Delhi, January 22, 2025: We expect the Union Finance Minister to announce an appreciable increase in the allocation of funds for R&D, which currently stands at less than 1% of GDP in India, compared to 3-4% in developed countries. The focus should now shift to value-driven growth through innovative drug development and cutting-edge pharmaceutical research by offering more incentives to research-driven pharma companies.
To encourage R&D investments, the Central government should introduce policies that reduce the financial burden on research. This includes increasing the weighted tax deduction for R&D expenditure from 100% to 200%, significantly reducing import duties on chemicals and lab consumables essential for research, and introducing grants or co-funding models for joint R&D initiatives between public institutions and private manufacturers. Lastly, the proposed Research Linked Incentive (RLI) scheme announced by the government in the last financial year should be swiftly rolled out to encourage increased R&D investment. These measures will make research more affordable and foster collaborations that drive innovation in essential and high-demand medicines.
At the same time, we should build on our strengths in pharma manufacturing through an incentive-based approach. One key strategy would be to expand the scope of the Production-Linked Incentive (PLI) scheme and increase its allocation to cover more pharmaceutical products and raw materials critical to self-reliance. This approach will help India consolidate its position as a global manufacturing hub.
Achieving the goal of “Affordable Healthcare for All” must remain a top priority. Opening more Janaushadhi Kendras across the country should be prioritized, as generic medicines play a pivotal role in ensuring equitable access to healthcare. Furthermore, the government could also introduce a graded premium structure under Ayushman Bharat to include middle-income households, currently excluded from the scheme. By offering subsidies based on income levels, broader health coverage can be achieved. Additionally, higher tax deductions for health insurance premiums could incentivize greater enrollment in health insurance plans, particularly among middle-income families.
Corporate Comm India (CCI Newswire)
