Finance Minister Arun Jaitley presented the Union Budget 2018 on Thursday, unveiling policy changes, focusing on farmers and the rural economy, announcing healthcare policies, boosting digital through five lakh wi-fi spots and infrastructural development.
While the budget did not have anything directly affecting the media and entertainment industry, it has sent out a positive sentiment in the market, which is expected to boost consumption and, hence, advertising. The push to digital economy will also help the industry, suggest experts.
Here are a few reactions from the media and entertainment industry:
Ashish Bhasin, Chairman and CEO South Asia, Dentsu Aegis Network
The budget has focused on the right areas, particularly the rural and agricultural sector, which is definitely going to spur rural demand in the coming months and years. The rural economy needed a boost. I also like the fact that the Finance Minister has focused on ‘ease of living’ rather than just ‘ease of doing business’ and has introduced healthcare benefits that will benefit nearly 50 crore Indians. It is a landmark step.
The emphasis on digital, particularly higher-end digital areas like artificial intelligence and usage of block-chain, shows that the government is committed to providing a further digital thrust. The steps being taken, like provision of free wi-fi and other forms of internet to all parts of the country, will be extremely beneficial in the long run for the digital sector. It will help agencies like ours who are partnering clients for digital transformation.
The introduction of the long-term capital gains tax on equities will soon be digested by the industry, I’m sure. But in some ways I see a missed opportunity because the simplification of GST processes for the services sector would have gone a long way to help the advertising industry. The advertising industry doesn’t mind paying the taxes but abhors non-productive, complex procedures, including filing of hundreds of returns every year.
Overall, I think the right sectors have got the incentives and therefore it should be good for the country. If it is good for the country, it will be good for the economy and once the economy grows, the advertising sector will benefit from it.
Devendra Darda, Managing Director, Lokmat Media Group
The budget has thankfully kept the interest of the consumers in line and so our readers. It is a consumer-friendly budget and there have not been any major ups and downs.
However, it is also looking at the business growth and entrepreneurship in the country. We look forward to manage our news print cost and giving the best to our readers.
Joy Chakraborthy, President, Revenue, Network18 and CEO, Forbes
Overall, the budget looks good. The 40,000 standard reduction means that Rs 2000 will come back and with 2.5 crore salaried people, translates to about Rs 5000 crore coming back to the economy - whether one spends it, or saves it, it helps consumption.
Secondly, rural is the focus for everyone. TV is focusing on rural because the growth is coming from rural. Advertisers are focusing on tier 2, 3 and 4 towns. The push on pharma, agriculture and infrastructure will help increase consumption and demand in the rural markets. In TV, it will help all players - regional and national.
Pharma is a small category, but they might increase overtime, considering the huge push that the budget gives to healthcare. Plus, 70% of total TV adex comes from FMCG, if rural gets a boost, FMCG will grow and hence TV
India is more sentimental. A good budget conveyed badly versus a bad budget conveyed in a better way. It's more about how people perceive it sentimentally.
Also, this is election budget and had to look good.
Megha Tata, COO, BTVI
Budget announcements signal a stronger eco-system for media and the broadcast industry. In continuation with my pre-budget expectations, I am happy the FM has kept his promise by reducing corporate tax rate to 25%.
Tarun Katial, CEO, Big FM
With healthcare being one of the focal points of the Union Budget 2018, the entertainment and broadcast industry did not see any major announcements. However, the proposal to reduce corporate tax to 25% for companies with a turnover of up to Rs 250 crore will encourage more investments by producers to create more compelling content for the entertainment industry. Also, the announcement of setting up 5 lakh wi-fi spots in rural areas will ensure wider reach, boosting overall digital content consumption in the country to a great extent.
Nisha Narayanan, COO, Red FM
It’s a balanced budget, very cautiously drafted keeping in mind the fiscal deficit targets. Giving boost to infra in railways, roads and highways, smaller city connectivity, agriculture sector by increasing MSP and launch of a National Healthcare Cover will help investments and provide new job opportunities. With imported items being made costlier, the government has given signs to domestic manufacturers to get an edge.
We feel that all above should give businesses a reason to spend more on advertising and marketing spends and overall increase consumer spending. The government has announced measures for the small and medium industry sector. As FM radio readies itself to get into medium and smaller cities, we hope that budget provisions will give boost to market expansion potential by increasing rural spending.
In due course, when GST gets settled, we are hopeful that monies will start flowing to some of these areas. Key infra sector spending will lead to improvement in consumer spending. Some action on reducing excise duty on fuels would have helped consumer sentiments, apart from expected change in IT slabs.
Overall, we find the budget a balanced one, aimed at growth and not getting just into populist measures, which is good for long-term economic health.
Rakesh Jariwala, Tax Partner, Media and Entertainment, EY India
India has taken one more step towards taxation of digital economy transaction by expanding the scope of domestic tax nexus rules by introducing the concept of ‘significant economic nexus’. It is proposed to now tax a digital economy transaction exceeding a monetary threshold (to be prescribed) or systematic and continuous soliciting of business or interaction with such number of users as may be prescribed, in India through digital means. MNCs, with tax treaty protection, will not be affected by the proposed changes as the expanded definition is unfounded yet in the tax treaties.
This is a clear indication by the Government that they will continue with their stance of taxing companies in India on source rules principles and extend them to digital companies who intend to benefit from India’s vast digital economy, offering a level playing field to the Indian players, but equally, they will be mindful of their international tax treaty obligations.
Deepak Lamba, CEO, Worldwide Media
Much to the delight of digital media players, government’s move will open extended avenues for them and give a strong push to regional and mainstream digital content in these markets. With extensive broadband penetration, affordable data prices and smartphones, the vision for digital India could well come to fruition in the coming years. Lastly, the estimated over 7% growth for the next fiscal creates a positive sentiment for India's economic and financial ecosystem.
Gautam Sinha, CEO of Times Internet
The government’s move will definitely help the industry in tapping unmapped areas of the country and would allow consumers to access the digital landscape and benefit from its offerings.
Vikas Katoch, Founder and CEO, Adomantra Digital
Digital video advertising would now be able to shift its ambit from the modern India to the traditional Bharat. The initiative to introduce broadband services on more railway stations and trains will invigorate the entertainment and digital advertising industry.
Ashok Kumar Gupta, Chairman, Zirca Digital Solutions
The slew of initiatives unveiled today not only benefits the agricultural and rural sectors but also succeeds in giving infrastructure development a boost. This budget will certainly give impetus to the economy. And, we look forward to more GDP growth in the coming days.
Siddhartha Roy, CEO of Hungama.com
The budget announcements on the 'Digital India' initiative focus on their plan to create a robust infrastructure and facilitate extensive rural penetration, which will lead to a sizeable boost in the digital consumption economy in the country. We expect entertainment to be big driver in this consumption journey.