Budget 2025: Pharma and Healthcare Sector Seek Tax Relief and Increased Spending

The Indian pharmaceutical and healthcare industries are optimistic about Finance Minister Nirmala Sitharaman’s upcoming Union Budget 2025. Their wish list includes increased healthcare spending, tax cuts for research and development (R&D), and support for infrastructure growth to drive innovation and accessibility.

Boosting Research and Development

Industry leaders are urging the government to prioritise R&D support, emphasising its role in strengthening India’s position as a global healthcare leader.

• Pharma Industry’s Demand

Sudarshan Jain, Secretary General of the Indian Pharmaceutical Alliance, suggests allocating at least 10% of the National Research Fund to life sciences and reinstating 200% weighted tax deductions for R&D expenses.

• Diagnostics Sector’s Appeal

Ameera Shah, Chairperson of Metropolis Healthcare, stresses the need for incentives in diagnostic technology to enhance India’s role in healthcare innovation.

Call for Higher Healthcare Spending

Healthcare players are advocating for a larger budget allocation to improve infrastructure and expand access to quality care.

• Budget Allocation Goals

Himanshu Baid, Managing Director of Poly Medicure, recommends increasing the healthcare budget to 2.5-3% of GDP.

• GST Simplification

Baid also proposes standardising GST at 12% across all medical devices to streamline the tax structure and boost ease of business.

• Export Incentives

Enhancing export incentives under the RoDTEP scheme from the current 0.6-0.9% to 2-2.5% could improve the global competitiveness of Indian-made medical devices.

Infrastructure and Tax Relief for Hospitals

Hospital leaders are seeking government support to reduce costs and accelerate infrastructure development.

• Infrastructure Incentives

Suneeta Reddy, Managing Director of Apollo Hospitals, suggests introducing an Infrastructure Linked Incentive (ILI) scheme for hospitals. She proposes a 50% incentive on the capital expenditure of hospitals with over 100 beds to offset taxes and promote capacity building.

• GST Reductions

Reddy also calls for reducing GST on key input services like lease rentals, housekeeping, and manpower to 5%, which could lower operational costs by 8-10%.

• Customs Duty Reforms

Lowering customs duties on advanced cancer treatment drugs and devices is also a priority.

Encouraging Preventive Healthcare

Diagnostics companies emphasise the importance of fostering a culture of preventive care.

• Higher Tax Exemptions

Increasing tax exemptions for preventive health check-ups from ₹5,000 to ₹10,000 and extending benefits to cover multiple family members could promote early diagnosis and regular health monitoring.

Conclusion

The pharmaceutical and healthcare industries are hopeful that Budget 2025 will address these critical demands, ensuring a stronger, more innovative healthcare system in India. Enhanced R&D support, higher healthcare spending, and infrastructure incentives are seen as essential steps toward making quality healthcare accessible to all.

To know more about major expectations from Union Budget 2025-26, click here.

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