The union minister for Finance & Corporate Affairs Nirmala Sitharaman tabled the Union Budget 2022 on February 1, the budget proposals are sure to bolster India’s Digital Journey and growth. The rolling out of 5G which was a much-awaited move as it will bring a further digital push across various sectors, including ad agencies. Content creation will see a huge transformation with the surge in consumer consumption especially in the video, voice, animation format and the gaming sector. The availability of high-speed internet connectivity in both urban and rural areas will encourage marketers to experiment with blockchain, AR, VR. Consumers will be able to engage with media across multiple devices, which will further democratize the entertainment sector.
“At the same time, challenges for traditional media persists as there was no announcement made to protect their interests despite a big negative impact for COVID, as the pandemic led to trends accelerating towards digital in a big way,” said Karan Taurani, SVP – Elara Capital.
According to Varghese Chandy, VP-Marketing & Advertising Sales, Malayala Manorama, the budget proposals do not have any direct benefit to the print industry in a quick analysis.
“Newspapers were expecting the waiver of the 5% customs duty on newsprint. This has not happened. No doubt it is an expansionary budget with a 35% increase in the capex. Many subsidies also seem to have been withdrawn. This may lead to inflation which needs to be managed,” Chandy said.
“There was no relaxation on the license fees or royalty for the radio industry, no financial grant or tax benefit was offered to the traditional media which has seen a sharp decline over the last two years and still struggles to get back to pre-Covid levels. The budget proposals didn’t consider any reduction in GST for cinema ticket prices, despite cinema being one of the most impacted mediums during the pandemic,” said Taurani.
Harish Bijoor, CEO at Bijoor Consults also believes that traditional media has missed the Budget-2022 bus.“The government seems to think more digital and less physical on this count for sure,” Bijoor added.
Naveen S, Head, Media Solutions, Mathrubhumi Group believes that though there are no direct sops/ relief measures for the M&E industry, which was indeed affected by the pandemic, the more than expected increase in capex will provide a boost to the economic growth which will definitely translate to better opportunities for business and in turn advertising and that’s definitely a silver lining.
‘We continue to believe that TV and cinema remain to be the preferred forms of traditional medium in the entertainment sector which will co-exist in the near term and continue to grow at a healthy rate even after breaching pre Covid levels,” said Taurani.
“The growth for TV media companies can be even stronger if they are able to execute well on digital strategy whereas growth in cinema will be driven by expansion of new screens and large scale cinematic content . Other traditional mediums like print and radio will need to reinvent their business models or push hard in terms of transition to digital ad media consumption on digital remains to be on the rise,” Taurani added.