Government of India has extended a five-year tax holiday, currently given only to hospitals in the rural areas, to those across the country, sending the shares of healthcare providers higher.
The Finance Minister Palaniappan Chidambaram, in his budget for 2008/09, also proposed an excise duty of 8 per cent for all goods produced in the pharmaceutical sector, down from 16 per cent. He also proposed to reduce by half the customs duty on certain specified life saving drugs, and its bulk drug ingredients, to 5 per cent. These drugs would also be exempted from excise or countervailing duties. Hospital stocks such as Apollo Hospitals, Fortis Healthcare and Malar Hospitals were up between 2-6 per cent after the finance minister proposed the tax holiday.