New Delhi: Though the Union Budget 2017 didn’t offer any specific booster packages for the Indian Media and Entertainment Industry, it still feels happy and positive with overall scenario that will indirectly help the industry to reap the benefit in the form of increase in spending due to the swelling pockets of common man by virtue of sops and tax reductions extended in the Budget.
The Pre budget push towards declaring the TV Industry under infrastructure category, tax withholding of Transponder charges and treatment of Electronic Media on par with the Print Media went unanswered in Budget 2017, But that didn’t disappoint the Industry as they hope that those issues can be raised and realized at appropriate time. The main reason that rejoices the industry is that the efforts taken by the government to boost the economic development of middle income group and rural markets that is reeling under the demonetization impact.
The Industry hopes that only positive sentiment among the consumer can lift the spending towards advertising from the FMCG and Consumer Durable sector, as the cancellation of ROs due to demonetization has caused ad revenue losses ranging around Rs 2000 cr and the union Budget 2017 has given hopes that the situation is likely to improve in the near future, which in-turn will act as a solution to the major threat blooming in-front of the M&E Industry.
Let’s have a look at the voices of leaders who are in the driver’s seat to steer their organisations in the growth path despite all odds before them:
Sudhanshu Vats, Group CEO, Viacom18 & Chairman, Media and Entertainment Committee, CII, said, “Much had been speculated about the economic slowdown post demonetization. With this budget, the government has taken important steps to boost the economy in a structured manner, building on the promise of transparent growth. Steps to liberalize the FDI regime further coupled with the abolishment of FIPB and tax reforms for MSME’s are bound to have impact in the foreseeable future. This budget has seen some positive solutions to tackle poverty in our country including one of the highest allocation of funds to MNREGA and rationalization of rate for the lower personal tax slabs. I am particularly enthused by the strong reforms push for digitization and look forward to digital transactions increasing in the country. This also augurs well for digital consumption of video content. The move to cap political donations in cash at Rs 2000 and all cash transactions at 300,000 are also much-needed, bold steps that are in line with the government’s commitment to uprooting corruption. With Swaach Bharat being close to our hearts, the budget has built further on this theme in a welcome move. I’ve said this before and will say it again: as the M&E sector we have a lot to gain from buoyance in the economy at the aggregate level and I believe this Budget has delivered on that front.”
Ashish Bhasin, Chairman & CEO South Asia – Dentsu Aegis Network said,“The Budget has some good growth oriented features, which should help the overall economic growth. Whenever the economy grows by 1% point, advertising grows by 1.5 – 2% points and therefore this should benefit the advertising industry in the long run. There are several steps to encourage Digitization. This is the right direction and eventually this will also benefit the Advertising Industry. The fact that the Service Tax was not raised is a relief and the Finance Minister has taken into account the sufferings caused by temporary setbacks due to demonetization and that is a welcome step.Personal taxation has shown some marginal relief, which should put some money into the pockets of people and spur the economy, though I wish some more had been done on that account. There was an expectation for corporate taxation to be reduced. Unfortunately, particularly for mid to large organized sector, that has not happened but hopefully it will happen in the near future.Overall, the Budget is better than what we had anticipated, for the Advertising & Media Industry in my view.”
Mr. M K Anand, MD & CEO, Times Network, said, “After the recent massive policy implementation of Demonetisation, my expectation was of some radical reforms. I was a bit disappointed on that count. However enhanced provision for MNREGA and allocations for Rural, Agriculture and allied sector and a clear push for the affordable housing sectors are the silver linings. Agriculture and Real estate are the most important employment generating sectors in India. This should improve the rural situation which is still recovering from Demonetisation. Hopefully that will have a ripple effect on spending and the larger economy.”
Mr. Punit Goenka, MD & CEO, Zee Entertainment Enterprises Limited (ZEEL) tweeted, “#Budget2017 speaks a lot about the Government’s positive & committed approach towards creating a stronger & balanced economy. Being directionally right & focused on spending in growth centric areas, it clearly reassures the fact that #Remonetisation is in!”
Mr. Tarun Katial, CEO, Reliance Broadcast Network Limited. Said, “Budget 2017 is Neutral for the M&E sector although the consumption centric budget will put more money in the pocket of the common man and hence help the advertising & broadcast industries. Radio broadcast industry has requested specific policy measures like 5% GST rate, reduction in custom duty for capex, etc and we look forward to the announcements when the GST rates are announced.”
Speaking about the Union Budget, Siddhartha Roy, CEO, Hungama.com said, “Focus on digital infrastructure in the current budget is extremely encouraging. Greater reach of broadband and data services into urban and rural India will lead to an inclusive digital economy, encouraging more people to embrace digital, driving consumption and transactions across the medium. Better quality of data is also set to give an impetus to the digital entertainment industry lead by video which is certainly poised for massive growth.”
Speaking about the budget announcements, Mr. Rahul Puri, MD, Mukta Arts Ltd. said, “The Union Budget this year has focused more on uplifting some of India’s poorest sections of society. While this year again the media and entertainment sector has been overlooked, however some announcements will definitely help our industry in many ways. Setting up the cyber security teams will help fight piracy, similarly, the government’s push towards Internet penetration in rural markets will help increase content consumption and increase the audience base. Further the abolishment of FIPB will make it easier for foreign investors to invest in Indian companies.”
Speaking on the budget announcements, Rahul Kanani – Group CEO of KSS Limited & CEO – KSS Digital Cinema Ltd said, “The Union Budget 2017 introduces the abolition of the Foreign Investment Promotion Board which is a positive step leading to inducing more foreign studios investment in India. More investments coupled with technological upgradation will certainly be a boon for the Indian film industry. Further, with the digital transactions getting a boost the industry especially single screen businesses which have suffered hugely because of the recent demonetization will help get a push.”
Mr. Manav Dhanda, Group CEO, SABGROUP on Union Budget said, “Overall there has been positives for the media and entertainment sector post the Union Budget. As digitization is the next big thing now, the end of March 2018 will see a great growth for digital video consumption across OTT. The youth can now have great opportunities laid for them by initiating the skill India mission that aims to start 100 India International centres. Also, since digitization is on a high, setting up high speed internet in 1.50 Lakh Gram Panchayat is a good move and will give a boost to internet penetration in India. There is no increase service tax by the government and is a positive outcome particularly for the M&E sector, a stable and positive fiscal situation is good for the economy which will also give an impetus to our advertising sales projections. Increased public spending through various schemes and focus on infrastructure investments should further help to accelerate economic growth. The economy seems to have being slowing down since demonetisation, impacting almost all sectors and one hopes this budget to act as a catalyst to propel the growth in the media sector as well.”
Mr. Deepak Lamba, CEO, Worldwide Media said, ‘’The Union Budget 2017 announced today, doesn’t include much on the M&E sector, however there are some points that will have a positive impact on our industry. The budget reinforced India’s huge shift towards digitization especially with the proposed deployment of high optic cables to increase internet penetration in rural India. This is a big positive for content creators like us, as it will boost the digital content consumption across online and mobile platforms. Further impetus on digital payments and transactions will eventually help the subscription model. Also, the government’s move to abolish FIPB to make the inflow of FDI smoother and to consider liberalization of the FDI policy will have a positive impact for players across sectors in the long run’’.
Harvir Singh, Editor, Money Bhaskar.com said, “Budget 2017-18 presented by finance minister Arun Jaitely is more or less a status quo budget. He has just tinkered on tax provisions and reduced tax rate for an individual who earns five lakh rupees from ten percent to five percent. At the same time he has levied a surcharge on the income between 50 lakh and one crore. He gave some relief to small and medium industry by reducing five percent tax rate up to a turnover of 50 lakh rupees. For big industries he did nothing big on tax front whether direct or indirect taxes. If we analyse budget 2017-18 from in the context of digital media, it has some negative and positive. Price increase of mobile phone is bad for digital media and content users because more digital content is being consumed on mobile platform than desktop. It has happened at a time when government is promoting use of digital platforms. There are some small incentives which can be seen positives for digital media. One is enhanced outlay of ten thousand crore rupees for Bharatnet a broadband network, which will create better infrastructure for net connectivity in rural India. It will increase the reach of digital media content and will be helpful to add more users. Another point is additional two year time for start-ups for tax benefits. As a lot of new digital media ventures are coming and can use tax benefit as start-ups.”
Speaking about the announcement on the budget, a spokesperson at ActorsApply.com said, “Government’s proposed reduction in the income tax for smaller organisations will add to the agenda of Startup India thereby expanding the scope for aspiring start ups. Also, the plan to provide a 7 year tax relief will help startups to overcome the losses incurred post demonetisation. The increase in time frame from 5 to 7 years for profit linked deductions was a much needed move specially for emerging start ups. The budget also levelled India’s huge shift towards digitization supporting it with the announcement of use of optic fibre cables for high-speed broadband connectivity in rural areas. This will mean increased Internet penetration through mobile and online mediums thereby boosting the start up sector overall.”