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Budget 2019: Remove angel tax, fast-track digitisation, put more money in consumers’ pockets, M&E industry tells FM Nirmala Sitharaman

With the Union Budget 2019 tomorrow, the M&E industry hopes there will be strong focus on improving economic growth via accelerated investment. The industry hopes the government takes forward the provisions presented in the Interim Budget 2019

Nirmala Sitharaman

The Narendra Modi government had announced several measures to fast-track the growth of the media and entertainment sector in its interim budget presented in February this year. The interim budget had proposed provisions such as universal digitisation, single-window clearance for filmmakers, anti-cam recording provisions to control piracy, reduction of taxes on movie tickets and increase in tax exemption limit among others.

The M&E industry hopes that in the second term of the Modi government, new Finance Minister Nirmala Sitharaman will carry forward these provisions in the upcoming budget to be presented on Friday.  

Industry leaders told BestMediaInfo.com they hope the government would announce measures to improve digital infrastructure and easy accessibility in rural areas, tax reforms and policies focused on creation of jobs.

Ashish Bhasin

Ashish Bhasin, CEO Greater South, Dentsu Aegis Network and Chairman & CEO India, said India is poised for a decade or more of growth and some bold steps in this budget would help make that a reality. “Advertising is a very sentiment-driven business in India. Anything that drives GDP growth drives advertising growth even more. In fact, the rule of thumb is that for every 10% growth in GDP, advertising grows by 1.5%. So, the new budget needs to be growth-oriented, needs to put more money in the pockets of the rural and urban consumers to propel spending. Further, there is an urgent need for tax reforms. Direct tax rates for both corporates and individuals need to be brought down noticeably and immediately,” he said.

“GST on advertising at 18% is just too high. It needs to be rationalised at 12% and the process and procedures need to be simplified as they are cumbersome, unproductive and wasting a lot of time,” he added.

MK Anand

MK Anand, MD and CEO, Times Network also stated that they expect some clear signals from the Government to improve credit growth and investment cycle. “There are signs of a slowdown which we expect this Budget to address. That includes increased outlay on infrastructure and addressing a distressed farm sector urgently. The New Tariff Order has a positive impact in the long term. But in the immediate term consumers are complaining of change in price: value equation. There may be a case to look at reducing GST for a year. This will be a great solace to consumers and the Industry,” he said. 

The GST slabs, however, are decided by the GST council and indirect taxes are no more a part of the union finance budget. 

The interim budget, presented in February, had emphasised the new India by accelerating ‘Digital India’ programme to one lakh villages in the next five years. Puneet Singhvi, President, Digital & Corporate Strategy, Network18, expects that the digital and infrastructural areas spoken about in the interim budget are taken forward.

He added, “The focus must shift towards vernacular language internet and reaching out to tier II and III towns and sectors in order to further increase and upgrade digital penetration and literacy. We hope to see issues related to investment, reduction in GST, taxes and content security be addressed and resolved on priority.”

Chetan Asher

While being optimistic that the renewed focus on digital infrastructure will lead to faster digital adoption, Chetan Asher, CEO, Tonic Worldwide, said, “I wish taxation would be further simplified and angel tax is removed completely, and there's enough provision to help India become the start-up capital of the world.”

Prashan Agarwal

As new digital players enter the market, Prashan Agarwal, CEO, Gaana, commented that ‘Digital India’ is a move in the right direction that will further bolster the music streaming economy by enhancing accessibility to tier II and Tier III markets. “Greater emphasis on Artificial Intelligence (AI) and digitisation will nudge home-grown brands to launch disruptive products and services. Given the online user-base for music streaming is expected to reach 400 million by 2021, this potential influx of a wider set of internet users will encourage more advertisers to employ OTT platforms for audience segmentation and targeting to drive higher revenue," he said.

Asheesh Chatterjee

According to Asheesh Chatterjee, CFO, RBNL, considering that there will be future auctions in FM Radio Phase-III, the customs duty on some of the imported equipment required for radio broadcast needs to be reduced, as these are long-term infrastructural investment. “These instruments are long-term investments for better infrastructure and are getting deployed in the smaller cities, because that's where the subsequent auctions will take place,” he said.

Apart from greater connectivity and digitisation schemes in tier II and III cities, the industry wants the government to encourage more investment in the entertainment industry to spur job creation in the sector.

Malini Agarwal

Malini Agarwal, Founder and Creative Director MissMalini Entertainment, said, “It was encouraging to see the entertainment industry receive attention in the Interim Budget. I am hopeful that this year’s budget will recognise the importance of empowering women as an engine of growth for the Indian economy and society at large.”

She added, “From targeted tax benefits to a reinvigorated National Creche Scheme and a greater focus on enforcing safety in workplaces and housing for women, the 2019 Budget can send a strong signal that our government is serious about correcting the current imbalance.”

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