On Friday, the Central Bureau for Direct Taxes (CBDT) proposed a roadmap to bring corporate tax down from the current 30 percent to 25 percent by doing away with tax breaks to India Inc.
This move has not gone down well with the pharma industry. Earlier in the day Kiran Mazumdar-Shaw, Chairperson and Managing Director, Biocon lambasted this move on the twitter. Talking exclusively to CNBC-TV18, she said it is very ironic because on one hand the Prime Minister Modi is pitching for investments into India from across the world and on other hand the tax Sops are being phased out.
Removal of exemptions is a retrograde step for pharma and biotechnology companies, said Mazumdar-Shaw.
According to her this move does not augur well for the economy. “Bureaucracy should not try to derail economic progress,” she said.
There will be absolutely no incentive to invest into R&D in India. Companies will take the R&D investments into other countries where attractive tax credits are offered. There needs to be a serious rethinking on the part of government, she said. There will be no big ticket investments coming in if tax sops are removed, she said.
She is also surprised that CBDT has not taken on board serious objections by DIPP.
However, there are a lot of good things happening too, like freeing up of FDI in sectors, aiming to help loss making discoms etc.
Transcript to follow
Biocon stock price
On November 23, 2015, Biocon closed at Rs 457.10, up Rs 3.40, or 0.75 percent. The 52-week high of the share was Rs 495.70 and the 52-week low was Rs 396.50.
The company’s trailing 12-month (TTM) EPS was at Rs 35.36 per share as per the quarter ended September 2015. The stock’s price-to-earnings (P/E) ratio was 12.93. The latest book value of the company is Rs 129.18 per share. At current value, the price-to-book value of the company is 3.54.