Digital media players have come up with mixed reactions to the Union Budget 2022, prima facie, it seemingly addresses big questions that surrounds the digital ecosystem. The Budget also provides the much-needed validation and promotion to the digital sector and betters the consumer sentiment towards the industry.
Although, the introduction of a 30% tax on income generated through digital assets might act as a deterrent for upcoming digital content creators.
Kunal Lakhara, CFO, Pocket Aces, said, “This budget has paved the path towards reviving the economy with the decision to keep the fiscal deficit pegged at 6.4% of GDP in 2022-23. The tax benefits offered for start-ups, by extending tax redemption for another year is much appreciated and will further encourage the start-up ecosystem of the country to grow and sustain their businesses while recovering from the pandemic.”
He added, “Launching our own digital currency using blockchain and other technologies is a welcomed move. Providing support under the PLI scheme for 5G is another step in the right direction and will help enhance the content consumption experience.”
Finance Minister Nirmala Sitharaman, during her Budget speech for the financial year 2022-2023, announced that the government is going to set up an Animation, Visual Effects, Gaming, and Comics (AVGC) task force. This task force is going to help build domestic capacity to serve the Indian markets and also meet global demand.
Digital-first and tech companies alike welcomed the announcement of an AVCG promotion task force and look at it as a step into the digital future, which India aims to be a part of.
Jehil Thakkar, Partner and Media & Entertainment Sector Leader, Deloitte India, said, “The setting up of the AVGC promotion task force announced in the Union Budget will help India achieve its potential of achieving 20 lakh jobs according to Deloitte projections. These are critical skills for the growth of the Metaverse and India is poised to take advantage of this ecosystem.”
Girish Menon, Partner and Head, Media and Entertainment, KPMG in India, said, “The Budget 2022, from an M&E perspective, provides an emphasis on further strengthening India’s digital infrastructure through clarity on 5G auctions, and start-up ecosystem; proposes the formation of AVGC taskforce to address domestic and global demands and, commits to 200 TV channels to foster digital education, especially amongst the rural areas, and envisages to foster the growth of microtransactions through the proposed Indian digital currency.”
Anupriya Acharya, South Asia CEO, Publicis Groupe, said, “The advent of 5G is sure to transform communications – for our industry, it will help the creation of better AV, voice and AR/VR experiences. It will also fuel digital payments, streaming entertainment, gaming, e-commerce, telemedicine etc, which in turn will aid more Unicorns! It is also heartening to note that a special Task Force is being set up for AVGC as this will help us build the much-needed capacity both for domestic as well as global markets. And then there have been no changes in income-tax slabs for people, which many consumer segments were worried about. This, in turn, boosts consumer sentiment.”
"The holistic focus on broad-based economic recovery in the Union Budget, with a huge emphasis on job creation and digital ecosystem of the Country, is a positive for India Inc. at large. The steps announced to build domestic capacity for Animation, Visual-Effects, Gaming and Comics segment will certainly help enhance capabilities, enabling the Country to compete more effectively at a global stage. An extension in the credit line guarantee scheme is also a welcome move, which will provide some much-needed relief to the relevant sectors which were impacted due to the pandemic,” said Punit Goenka, MD & CEO, Zee Entertainment Enterprises Ltd.
Speaking on the OOH opportunities, Atul Shrivastava, Group CEO and Executive Director at Laqshya Media Group, said, “As India’s economic growth is estimated to be 9.2% in the upcoming financial year so it would be good for all the industry and with overall growth, we are sure advertising and media will also show remarkable growth which was low due to the pandemic in the last couple of years. As announced the National Highways are to be expanded by 25,000 km under PM Gati Shakti mission. Highways are adding a new dimension to the growth of the OOH Industry as advertising on the Highways is emerging as a very strong choice for brand building for many categories.”
Neeraj Roy, Founder & CEO, Hungama Digital Media, also expressed satisfaction with the announcements made by the Union Finance Minister, "This is a budget that is welcoming web 3.0, the Indian government has been at the forefront of digital adoption, with the introduction and recognition of 'virtual goods or digital assets', the initiative of a task force for AVGC and even the introduction of a digital bank that would embrace the Blockchain, it is their way of ushering in a New India into the Metaverse. We welcome these announcements and look forward to setting a place of leadership for India in web 3.0."
However, there are experts and senior personnel who have their doubts about the introduction of a public digital currency and income on digital assets is being taxed.
Rikki Agarwal, Co-Founder and COO, Blink Digital, said, "The proposed announcement of a new digital rupee powered by blockchain technology and taxing digital assets has sent mixed signals from the government. The move has cleared the impending ambiguity around cryptocurrencies in India, signifying its acceptance as an asset and legalising it to boost the economy. However, imposing heavy taxes on digital assets is an indication that the government intends to discourage the same. We will wait for more clarity on the regulations.”
Speaking on the impetus provided by the budget, Kartik Sharma, Group CEO India, Omnicom Media Group said, “With an impetus on holistic growth, developing infrastructure and job creation across sectors, the 2022 union budget shows promise with a focus on the big picture. “
He added, “Reviving economic growth in the post-pandemic environment has been a focus for this government and this progressive, digital-first, and development-oriented budget reflects that. Not only does it provide a boost to the MSME, agriculture and healthcare verticals, but also signals that investing in infrastructure today will connect India better tomorrow.”
Sumit Ghosh, Co-founder and CEO, Chingari app, said, "Today can be considered as a historic day for the Indian Digital journey. The much-awaited welcome by the Indian government to the use of Digital Currency and Crypto transactions will soon lead India to be one of the top economies of the world. Investing in and utilising advanced technologies like blockchain is what helps the nation grow at par with the other countries globally. With $GARI Social Tokens listing on 19 global exchanges and Chingari transforming the Web3 universe for its creators, we are proud to be a part of the digital and crypto revolution.”
On the need for crypto-awareness, he added, “Currently the information and awareness about Crypto/ Digital Currency is very limited in India, which is also a major challenge that needs to be resolved. Chingari powered by $GARI will be stepping up and taking an initiative towards spreading more awareness amongst the internet users in India."
Rakesh Saraf, Founder and Director, Windsor Digital said, “Budgets should not be a surprise. However, in India, we have been accustomed to surprises in the budget. The fewer surprises there are in the budget, the better it is for the economy and the country. This budget contained few surprises. The recognition of digital transactions as being part of the mainstream economy is a step in the right direction. Cryptocurrency whether issued by Bitcoin, Ethereum or the RBI is also a positive move.”
The gaming industry should be excited about the prospects the budget has offered. Talking about the future of gaming, Gaurav Agarwal, Co-Founder of Gamezop, said, “Budget 2022 seems to announce India's growing focus for export income, with a projection to reduce fiscal deficit to 4.5% of GDP from the current rate of 6.9%. It is heartening to see that the Special Economic Zone Act will be replaced with suitable legislation. This is a welcome move after the government had put an end to the 15-year tax holiday last year. The government has the opportunity to bring pro-business legislation in line with global trade norms to bolster exports through the new SEZ norms. For individuals, the option to file revised ITR up to 2 years from the end of the assessment year, as well as regulatory clarity on cryptocurrencies, are good moves.”
“As we know, India presently commands around 10% of the global AVGC market and has the potential to reach 20-25% by 2027. This task force will facilitate employment for the youth, build domestic capacity to serve the Indian markets and also meet global demand.”
Kanav Singla, Founder and CEO of Metadome, said, “Global impact of the pandemic has accelerated technology and digital adoption across industries. And with the advent of the virtual world with Metaverse, all major big tech companies across the world are focussing on developing new tools to provide virtual immersive experiences for individuals and brands.”
Although he also said that the announcement of a 30% tax on the income from digital assets; might lead to a fall in the number of digital creators that are looking to create NFTs for the virtual world.
Vibha Singh, Vice-President, Strategy and Communication, Et MediaLabs, said, “The government's focus on start-ups and them being looked at as the drivers of growth has been monumental in extending the period of incorporation of eligible start-ups by one more year for tax incentives. This step will encourage the entire start-up ecosystem and might also result in a higher influx of new business ventures.”
The digital agencies expect that there will be continuous improvements through the year and a more holistic future awaits digital India.
Neeraj Sharma, Vice-President, Global Business, Globale Media, sees great promise in the budget, he said, “The 'India at 100" vision is profound and I feel the whole digital sector is poised for better days. The mobile advertising tech sector has a bullish future too. Combine that with India's Make in India machinery and you could have companies from India blossoming on the world maps."