Stocks of pharmaceutical companies are largely less volatile around the Budget but Cipla, having more domestic exposure, has seen volatility. Increase in health care expenditure (low at 1.5 per cent of total expenditure) and boost Budget 2017-18 to research and development (R&D) activity via incentives are among key expectations. In the previous Budget, Customs and excise duties remained unchanged but expectations on boosting infrastructure for the industry were not met.
Current Budget: While R&D incentives and rise in health expenditure will be looked at, there are high expectations of a cut in the minimum alternate tax currently levied on Special Economic Zones. Expectations on removal of excise duty disparity between formulations and active pharmaceutical ingredients could also keep volatility high.