Content
- India: A Global Bioeconomy Powerhouse
- GST Reforms 2025: Relief for Common Man, Boost for Businesses
India: A Global Bioeconomy Powerhouse
Growth Trajectory
- Expanded from USD 10 bn (2014) → USD 165.7 bn (2024).
- CAGR: ~35% over the decade, contributing 4.25% of GDP.
- Target: USD 300 bn by 2030, USD 1.4–2.7 tn by 2050 (6.5–12% of GDP).
- Global context: Bioeconomy expected to hit USD 30 tn by 2050 (12% of world GDP).
Relevance :
- GS III (Economy, S&T, Environment) – Biomanufacturing, energy independence, innovation ecosystems.
- GS II (Governance) – Policy initiatives like BioE³, regulatory frameworks.
- GS I (Geography & Society) – Regional contribution, rural bio-agri impact.
- Essay & Ethics – Sustainability, bio-innovation, and climate justice.
Subsectoral Distribution (2024)
- BioIndustrial (47% | USD 78.2 bn)
- Biofuels, bioplastics, enzymes, green chemicals.
- Key driver of circular and green economy.
- BioPharma & BioMedical (35.2% | USD 58.4 bn)
- Affordable generics, vaccines, biologics, diagnostics, MedTech.
- Global reputation for cost-effective biopharma.
- BioAgri (8.1% | USD 13.5 bn)
- GM crops, Bt cotton success, precision farming, biofertilizers, biopesticides.
- BioResearch & BioIT (9.4% | USD 15.6 bn)
- Contract research, clinical trials, bioinformatics, biotech software.
- Strengthens India’s role as a global R&D hub.
State & Regional Contribution (2024)
- Top States:
- Maharashtra (USD 35.45 bn | 21.4%), Karnataka (USD 32.4 bn | 19.5%), Telangana (USD 19.9 bn | 12%).
- Gujarat, Andhra Pradesh, Tamil Nadu, Uttar Pradesh follow.
- Regional Share:
- South (45.4%), West (30.3%), North (18.5%), East (5.8%).
- South dominates due to biotech clusters (Bengaluru, Hyderabad).
Major Policy Interventions
- BioE³ Policy (2024): Biotechnology for Economy, Environment, Employment.
- Biomanufacturing & Biofoundry Initiative: Move from consumptive → regenerative production.
- 21 BioEnabler facilities: Shared infra for startups & R&D (focus on microbial biotech, smart proteins, marine biotech, gene therapy).
- BioE³ Youth Challenge (2025): Monthly innovation contest, prizes (₹1L to ₹25L), incubation & mentoring for grassroots biotech talent.
Breakthrough Achievements
- Ethanol Blending:
- 20% blending (2025) → achieved 5 years ahead of target.
- Benefits: ₹1.21 lakh crore to farmers, elimination of sugarcane arrears, forex savings ₹1.44 lakh crore, crude substitution 245 LMT.
- Vaccine Leadership:
- Serum Institute: global share rose from 19% (2021) → 24% (2024).
- 3 Indian firms (Serum, Bharat Biotech, Biological E) among world’s top 10.
- Supplied 40% of WHO vaccines; 20% exports went to Africa.
- Precision Medicine & AMR:
- Launch of Nafithromycin (anti-AMR antibiotic).
- CAR-T therapies, AI-driven diagnostics, oncology gene sequencing.
Climate Change & Sustainability Role
- Bioeconomy enables:
- Emission reduction via biofuels, recycling, bioplastics.
- Carbon capture in agriculture, afforestation, food waste reduction.
- Greener manufacturing processes → reduced fossil dependence.
- Central to India’s net-zero roadmap by 2070.
Startup & Investment Ecosystem
- Startups: 13,000 in 2025 (from 5,365 in 2021; +142%).
- Products: 800+ launched; $600 mn follow-on funding.
- FDI: MedTech FDI grew from $370 mn (2022) → $618 mn (2024).
- Ecosystem backed by BIRAC, DBT, venture funding, incubation infra.
Global Positioning
- India is:
- Vaccine hub (low-cost, mass production).
- Ethanol leader (fastest adoption curve globally).
- Emerging precision medicine hub in the Global South.
- R&D outsourcing base for pharma & bioinformatics.
- By 2050, India may rival US, EU, and China as a bioeconomy power centre.
Challenges & Way Forward
- Challenges:
- Regulatory harmonisation across subsectors.
- Biosafety, bioethics, and AMR management.
- Funding volatility & global competition in biotech patents.
- Need to scale from pilot → industrial-level biomanufacturing.
- Way Forward:
- Strengthen IP regime, clinical trial capacity, and global partnerships.
- Incentivise R&D tax breaks, green financing, and rural biotech adoption.
- Enhance regional biotech clusters in East & North India.
- Foster public trust via awareness on biotech safety and benefits.
GST Reforms 2025: Relief for Common Man, Boost for Businesses
Historical Context
- Pre-GST Era (Before 2017)
- Fragmented indirect tax system (VAT, excise, service tax, octroi, entry tax).
- Multiple levies created cascading effect (“tax on tax”).
- Different state laws caused compliance burden & litigation.
- Weak input tax credit provisions → high cost of goods & services.
- GST Introduction (2017)
- Rolled out on 1st July 2017 via 101st Constitutional Amendment.
- Subsumed 17 taxes & 13 cesses into a single national tax.
- Created “One Nation, One Tax, One Market” framework.
- Brought IT-based filing, improved transparency, and widened the tax base.
Relevance :
- GS III (Economy) – Tax simplification, inflation relief, MSME competitiveness, boost to agriculture & manufacturing.
- GS II (Governance) – GST Council (Art. 279A), cooperative federalism, welfare-linked exemptions.
GST Performance till 2025
- Taxpayer base: Grew from 66.5 lakh (2017) → 1.51 crore (2025).
- Revenue Growth:
- FY 2017–18: ₹82,000 crore avg. monthly collection.
- FY 2024–25: ₹2.04 lakh crore avg. monthly collection.
- CAGR ~18%, gross collections doubled to ₹22.08 lakh crore in 4 years.
- Formalization: Stronger compliance + technology adoption increased revenues.
2025 GST Reform Highlights
- Simplification of Tax Structure
- Shift from 4 slabs (5%, 12%, 18%, 28%) → two slabs: 5% & 18%.
- 40% slab retained for luxury & sin goods (tobacco, aerated drinks, luxury cars, yachts, private aircraft).
- Focus: Relief to common man, lower input costs for MSMEs, boost to agriculture & manufacturing, and correction of inverted duty structures.
Sector-Wise Impact
A. Household & Food
- Daily essentials: soaps, toothpaste, shampoos, bicycles → down to 5%.
- Indian breads, paneer, UHT milk → NIL GST.
- Packaged foods (sauces, pasta, chocolates, coffee, preserved meat) → 18/12% → 5%.
- TVs (>32”), ACs, dishwashers → 28% → 18%.
Impact: Boost in affordability + demand for FMCG & consumer durables.
B. Housing & Construction
- Cement: 28% → 18%.
- Marble, granite, bricks, bamboo products → 12% → 5%.
Impact: Lower construction costs, cheaper housing, push to infra sector, job creation.
C. Automobiles
- Two-wheelers ≤350cc & small cars: 28% → 18%.
- Buses, trucks, three-wheelers, auto parts: 28% → 18%.
Impact: Relief for middle-class + push for auto manufacturing & exports.
D. Agriculture
- Tractors: 12% → 5%.
- Tires & tractor parts: 18% → 5%.
- Irrigation equipment, harvesters, sprinklers: 12% → 5%.
- Bio-pesticides, natural menthol: 12% → 5%.
Impact: Lower input costs, farmer relief, boost to sustainable farming.
E. Services
- Hotels (<₹7,500/day): 12% → 5%.
- Gyms, salons, yoga: 18% → 5%.
Impact: Boost to hospitality, wellness, and tourism sectors.
F. Textiles, Toys & Handicrafts
- Manmade fibre: 18% → 5%; yarn: 12% → 5%.
- Handicrafts, statues, paintings, toys: 12% → 5%.
Impact: Boost exports, support artisans, rural jobs, cultural preservation.
G. Education
- Exercise books, pencils, erasers, crayons, sharpeners → 0% GST.
- Geometry boxes, trays: 12% → 5%.
Impact: Reduced education costs, student-friendly.
H. Healthcare
- Life-saving drugs & diagnostic kits: 12% → 0%.
- Other medicines (Ayurveda, Unani, Homeopathy): 12% → 5%.
- Medical oxygen, surgical instruments: 12–18% → 5%.
- Spectacles: 28% → 5%.
Impact: Affordable healthcare, support for domestic pharma & MedTech.
I. Insurance
- Life & health insurance premiums → GST exempt.
Impact: Promotes financial security, supports Insurance for All by 2047.
Broader Economic Impact
- Consumers: Lower costs → higher disposable income → demand growth.
- MSMEs: Lower input costs, corrected inverted duty structure → competitiveness.
- Manufacturing: Boost to domestic value addition, exports.
- State Revenues: Simplified rates + wider base → higher compliance → stable revenues.
- Employment: Growth in construction, auto, textiles, handicrafts.
- Inflation: Expected moderation due to lower GST on essentials.
- Formalization: Simple two-slab system reduces disputes, encourages compliance.
Challenges Ahead
- Revenue Neutrality: Risk of revenue loss from sharp rate cuts; must be offset by better compliance.
- State Compensation: Concerns of revenue shortfall for some states (esp. after cess phase-out).
- Transition Issues: Businesses must quickly adapt to new slabs, possible IT challenges.
- Luxury/Sin Goods Taxation: High 40% rate may sustain black market activity.
Long-Term Significance
- Reinforces GST as citizen-centric & business-friendly.
- Aligns with India’s goal of Ease of Living + Ease of Doing Business.
- Supports Viksit Bharat @2047 vision by:
- Affordable healthcare & education.
- Strong MSME & manufacturing base.
- Sustainable agriculture.
- Formalized, transparent tax system.
