Bengaluru, Feb 27 The biotechnology industry on Friday welcomed the slew of incentives and tax reliefs proposed in the union Budget for the ensuing fiscal 2010-11.

"Though we need to read the fine-print for details, we thank the finance minister for responding to some of our concerns, especially for raising the weighted deduction on all in-house R&D (research and development) to 200 percent from 150 percent," Biocon chairperson Kiran Mazumdar said here.

As significant part of the R&D budget is not in-house, the industry hopes the benefit would apply to costs incurred on filing international patents for protecting the IP (intellectual property) and conducting clinical trials outside the country.

"The increased deduction should allow us to claim international patenting cost and in licensing technology. Otherwise, it will not be helpful. The government needs to be little more insightful than making cosmetic changes," Mazumdar said.

The Association of Biotechnology led Enterprises (ABLE) also said legitimate R&D expenses need to be covered under the weighted deduction scheme.

Lauding the service tax exemption on testing and certification of seeds, the association said the concessions extended to medical devices and equipment industry would benefit the healthcare sector in reducing the end-costs.

The budget has proposed concessional basic duty of five percent, CVD (countervailing duty) of four percent and zero special additional duty on medical equipment. Specified inputs for manufacturing orthopedic implants are also exempted from import duty.

"The complete liberalisation of pricing and payment of technology transfer fee, trademark, and brand name and royalty payments will augur well to attract fresh investments in the sunrise industry," the association said in a statement.

The association, however, termed the three percent increase in minimum alternative tax (MAT) rate to 18 percent as a negative signal when all other taxes were being reduced.

In a related development, Fortis Hospitals chief executive Vishal Bali regretted that the budget had ignored the call for reforming the Indian healthcare.

"Though the budget has a whopping 46 percent of plan allocation for infrastructure development, not finding healthcare on the finance minister's agenda takes another year away in bridging the affordability and accessibility gap in the sector," Bali said in a statement here.

"The only positive step to help indigenous manufacture of consumables and implants is the import duty waiver for manufacture of orthopedic implants," Bali noted.

According to Manipal Health Systems chief executive Rajen Padukone, relaxation of FDI (foreign direct investment) norms will result in more international players entering the healthcare sector.

"Extension of tax benefits on contribution to central government health scheme (CGHS) will attract more funds to the scheme and improve its operations substantially," Padukone said in a statement.