ST waiver on clinical trials of new drugs right step : Cadila chief

Ahmedabad, Feb 28 (UNI) The exemption of clinical trials from the levy of service tax in the Union Budget is a welcome step and it will help in development of new drugs, a pharma company said here today.

However, certain income tax benefits in respect of contract manufacturing and contract research should have been announced considering the high potential of Indian pharmaceutical companies, I A Modi, Chairman, Cadila Pharma Group opined.

Reacting to the Budget 2007, he said it was a long outstanding demand of the industry that budget should allocate more funds for research and development for pharmaceuticals including Biotech, which has not been met.

''Such measures is needed to catapult Indian pharmaceutical industry as a front runner in global scenario,'' Mr Modi added.

However, extension by another five years to end on March 31, 2012, in respect of availability of Weighted Deduction on R&D u/s 35(2AB) of Income Tax Act, meets with the expectations of the Industry, he said adding exclusion of free samples from the purview of Fringe Benefit Tax (FBT) is very much appreciated.

On the budgetary impact on Gujarat, Mr Modi said the Budget is neutral to Gujarat in its tax and other policy proposals except various measures announced for promotion of infrastructure would help Gujarat retain its leading position.

On a rating of scale one to 10, he said that considering the constraints, in terms of forthcoming elections, inflation etc the Finance Minister Chidambaram has not taken any major policy decisions on reforms.

At the same time, he has more or less kept status quo on the broad framework of policies and tax rates and to that extent the budget is harmless.

UNI