Industry & Economy
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Bio-tech & Genetics
`Likely to see flight of IP to tax-friendly nations'
Our Bureau
Bangalore
,
Feb. 28
The silence on extending a key demand of the pharma-biotechnology sector - the 150 per cent weighted average tax deduction on research spend - beyond March 2007 can diminish indigenous research investments; it would dry up an already low pharma intellectual property record and see a flight of IP, according to Ms Kiran Mazumdar-Shaw, CMD of Biocon Ltd.
She said this would lead to an increased dependence on licensed and patented drugs of innovator MNCs; if not corrected during the fiscal year, it could push up healthcare costs, as in the case of bird flu drug.
"(The biotechnology) industry has been seeking fiscal support through a five-year weighted tax deduction, lower duties on R&D consumables and equipment - to be on a par with other competing nations; and duty-free import of enabling technologies to promote collaborative R&D. Unfortunately the Budget has completely ignored the industry's recommendations with respect to all the above," Ms Mazumdar-Shaw said.
"If this incentive if not made available beyond 2007, the allocation into R&D is likely to diminish resulting in India's dependence on external innovation and the country's inability to address unmet medical needs through affordable drugs. The recent avian flu crisis should be a wake-up call for such an urgent investment in indigenous R&D," she said.
No provision has been made for incremental investment in science and technology, at a time when India Inc is banking on research for its survival under TRIPs and trying to be a global R&D hub. "To establish India as a laboratory of the world, fiscal policies need to support the high investment needs and the long gestational timelines of this segment."
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