|
Capital markets will get a boost
The finance minister had a tough act to perform, in trying to stimulate theslowing economy on one hand and controlling the fiscal deficit on the other.By keeping a sharp focus on the fiscal and revenue budget, both in the lastfiscal year and the current year, he is trying to contain inflation. Byallowing $50 million investment abroad without the earlier three yearsprofit requirement and utilising 100 per cent of capital raised throughADR/GDR for international investments, the minister has given a boost toglobalisation of Indian companies.Capital markets will get a boost by the steps like reduction in interestrates and the raising of the limit of FII holdings to 49 per cent andtwo-way fungibility of GDR/ADR and equity shares. Specific to the pharmaceutical industry, this budget has attempted toaddress a couple of major concerns expressed by the industry over the years.The significant reduction in the list of drugs covered under Price Controlis sure to bring cheer to the industry. While the actual impact to eachcompany can only be estimated after the new drug policy is announced, thelogic of letting market forces control the prices of medicines, rather thanprice fixation by government cannot be questioned. Allowing the 150 per centweighted deduction of research expenses in biotech, clinical trials andpatenting research efforts for the purposes of income tax is an extremelywelcome step. Also, all attempts being done to protect the intellectualproperty residing in traditional Indian medicines are very laudable. Thepharmaceutical industry will benefit from the removal of the 10 per centsurcharge on customs duty. Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
|
