The sentiments of the media and entertainment sector have gone up after the Union Budget 2020 put more money in the consumers’ pocket, which in turn is expected to increase consumption. The budget also gives direct cash benefit to the newspapers by reducing customs duty on the import of newsprint from the existing 10% to 5%.
With digital driving the growth of the media and entertainment industry, the government’s Rs 6,000-crore push to BharatNet programme in 2020-21 to further enhance broadband connectivity in rural areas is seen as a big boost to the entire sector.
According to Girish Menon, Partner and Head, Media and Entertainment, KPMG in India, “Although there was no direct reference to the media and entertainment sector in Budget 2020, the focus on improving India’s digital connectivity bodes well for the sector. Finance Minister Nirmala Sitharaman’s announcement that an amount of Rs 6,000 crore will be spent on BharatNet initiatives will see more citizens connected to the proposed pan-India FTTH network. Media and entertainment is increasingly becoming a digital medium and an enhancement of the underlying digital communications infrastructure will support more immersive experiences. Finally, the focus on building a vibrant start-up ecosystem with measures to improve access to funding and IP protection will help India emerge as a global hub for technological innovation.”
Ashish Bhasin, CEO, APAC and Chairman, India, Dentsu Aegis Network, found the budget good in some ways because it has attempted to put money in the hands of the middle class through rationalisation of tax rates as well as has concentrated on looking after the agricultural sector, including introduction of best practices like storage for producers and other measures.
However, Bhasin felt the budget as a bit of a missed opportunity too.
“While it is good to see that the dividend distribution tax has been abolished, I expected more on the rationalisation of direct taxes, particularly the cess introduced over and above the tax rates,” he said.
Bhasin’s deputy and Dentsu Aegis Network (DAN) India CEO, Anand Bhadkamkar, hailed the budget for focusing on easing and simplification of compliance, with changes in corporate laws as well as in GST and direct taxes. “However, I was expecting further simplification of cess and surcharges beyond tax rates across slabs,” Bhadkamkar said.
However, the expectations from the budget were high on the background of the current economic slowdown, and as such it seems to be short of matching those expectations, with no specific industry sector-focused sops to provide stimulus. “While the budget shows focus on long-term growth and social development, overall in the current scenario it looks like a mixed budget, falling a bit short of market expectations of more corrective measures,” he added.
Navin Khemka, CEO, Mediacom South Asia, a GroupM’s media planning agency, feels this budget is a status quo and the media investments may continue to be sluggish.
"What is required is more purchasing power to the Indian middle class. This will help boost demand in the sluggish economy. I hope the investment in infrastructure and Kisan Express helps in achieving this objective in the long run. Short term, however, I think this budget is a status quo. Demand growth could be sluggish and this could continue to impact media investments by corporates," Khemka said.
Bharat Khatri, Country Lead, Xaxis India, GroupM’s programmatic arm, found the digital push by the government as a great move.
He said, “The first budget of this new brave decade continues to focus on digital infrastructure. BharatNet project getting additional Rs 6,000-crore funds to boost digital connectivity and allowing private sector to build data centres in India is a great move, which reflects the government’s clear vision to transform India into digitally empowered society. And as Sitharaman clearly pointed out that India has already started seeing innovations in the space of IOT, AI, data cloud, quantum computing etc. All are rewriting the world economic orders and will also disrupt the established conventional business models in India. To support these innovation and disruptions, the budget also lays down a visionary roadmap on skill and education development by providing Rs 99,300 crore to boost quality of education and proposed to start degree-level full-fledged online education programmes.”