Budget 2012: Increase health care allocation to 2.5 pc of GDP, says Dr Reddy's

HYDERABAD: At least 2.5 per cent of the country's GDP in the forthcoming Budget should be allocated on improving health care, says Dr Reddy's Laboratories, India's second largest drug maker.

"Time has now come to incentivise and encourage the penetration of health care reach and delivery in India.

"A good way to start would be to signal an increased allocation approaching 2.5 per cent of GDP as spending on health care with a more favourable policy environment," Dr Reddy's CFO Umang Vohra told PTI.

According to him, any improvement in spending over the historical average of 2 per cent of GDP on health care will draw huge appreciation from all stakeholders.

The long term effects of this will be very profound on all the key indicators of health such as quality of health, diagnosis and treatment of disease incidence, he added.

On the expectations from pharma industry, Vohra said the different tax structures such as 5 per cent for formulations and 10 per cent for active pharma ingredients should be normalised so that the cash conversion cycle improves for most players.


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"Another wish would be to have increased clarity around provisions that relate to weighted tax deduction on account of Research and Development and whether the existing deduction is availed in full due to existing MAT provisions," he added.

Vohra said he hoped that the Finance Minster would consider the long pending demand to consider infrastructure for health care industry this year.

The status would help push investments and allow participation from the private sector, he said.