Bangalore, March 1
A CATEGORICAL statement on policy support, duty and tax exemptions, the promise of increasing the Rs 150-crore R&D corpus next year: a sector that is on the ascendant couldn't have asked for more, according to Ms Kiran Mazumdar-Shaw, CII Biotechnology Mission chairperson and CMD of Biocon Ltd.
Although the sector has been promised hike next year in the existing Rs 150-crore R&D corpus fund, there are at least 2-3 more fund options it can dip into, according to Mr Nitin Deshmukh, Director of biotech industry association ABEL and Head, Private Equity, Kotak Mahindra.The biotechnology industry could also tap the Rs 500-crore fund created with SIDBI for investment in SMEs. "The sector can also be expected to benefit from the announcement of grant of Rs 100 crore to the Indian Institute of Science."
"The Government has accepted our recommendations for funding support for research and entrepreneurship in the biotechnology sector through increased allocation to the existing Rs 150-crore R&D corpus, another Rs 50-crore National Fund for Strategic Agricultural Research and continuing with the 150 per cent weighted average tax deduction," Mr Deshmukh said.
The industry's pre-Budget wishlist had sought a Rs 200-crore fund for start-up enterprises and 100 per cent FDI. It had sought 200 per cent weighted average tax deduction for R&D; and extending the scheme for five more years under Section 35 (2AB).
For the remaining issues, it would now watch out for the biotechnology policy that is in the pipeline. The policy is expected to come out in a month's time, Ms Mazumdar Shaw said from London.
The other positive growth factors are the five per cent cut in Customs duty on nine specific machinery items used by the pharma and biotech sectors besides the overall reduction in peak Customs duties on capital goods and consumables.
Dr K.K. Narayanan, Managing Director of agri-biotech company Metahelix, said that by a quick estimate, the reduction in Customs duty for equipment could mean a significant 35-50 per cent saving for pharma and biotech R&D companies.