How the govt schemes ahead of assembly elections will impact Adex

As the assembly elections in Madhya Pradesh, Rajasthan and Chhattisgarh draw near, state governments are rolling out substantial schemes and incentives for the public.

Vareesh Tiwari, Chief Operating Officer - Rajasthan State, DB Corp believes that this influx of funds and additional disposable income is set to fuel a surge in consumption, driving up media spends in the region.

According to Tiwari, in total, nearly Rs 60,000 crore will flow into the hands of the public, in these three states, sparking an economic boost and reshaping advertising dynamics.

Moreover, he pointed out that state print media is the best available media vehicle to do outreach to the state population.

Striking a similar tone, various industry leaders also emphasised that given the potential increase in media spends by the government and political parties, print medium will be the most effective for advertising their products.

The Madhya Pradesh government has introduced several initiatives, such as, Laadli Behna Yojana: Providing a monthly grant of Rs 1,250 to over one crore women. This program has been ongoing for three months. Ujjwala Scheme Subsidy: Offering a subsidy of Rs 458 to 84 lakh gas connection holders, reducing the monthly cylinder cost to Rs 450.

Conversely, the Rajasthan government's schemes comprise Indira Gandhi Gas Cylinder Scheme: Granting a monthly subsidy of Rs 408 on gas cylinders, benefiting up to 55.84 lakh beneficiaries. Compensation for Lumpi: Transferring Rs 40,000 to the parents of 76,030 cows that perished due to Lumpi, with an initial transfer of Rs 168.85 crore.

In Chhattisgarh, the government came up with some schemes including, Chhattisgarh Unemployment Allowance Scheme: Providing Rs 2,500 per month to 10 lakh unemployed youth. Support for Diversified Farming: Offering Rs 12,638 per year to 36.71 lakh farmers to encourage the cultivation of crops other than paddy.

While explaining the influence of these government schemes and freebies on the local economy and the spending capacity of state residents, Tiwari said that state elections invariably result in an influx of additional funds into the region, driven by the government's endeavours to highlight its achievements and the introduction of numerous new programs and initiatives.

“State print media is the best available media vehicle to do outreach to the state population. Moreover, the introduction of new incentives and benefits by different state governments will provide an additional source of disposable income for the public. This, in turn, is expected to lead to an uneven surge in consumption, ultimately resulting in increased media spends,” he added.

On being asked about the anticipated impact of government schemes and incentives, on media spending, Tiwari said, “Nearly Rs 60,000 crore is set to flow into the hands of the public, as extra disposable income, in the states of Madhya Pradesh, Rajasthan and Chhattisgarh, thanks to the recently announced freebies effective from July 2023. This injection of funds is expected to stimulate consumption, surpassing the impact of election-related expenditures and the introduction of new development initiatives by state governments. Notably, we are currently observing a notable boost in the confidence of retail and local advertisers, evident through their media spends.”

According to Tiwari, the schemes introduced by the state governments are introduced with withdrawal restrictions in place and are designed to remain in effect for the long term.

On being asked that with the governments announcing substantial spending on public schemes, how do industry players expect this to impact consumer spending in their industry, Vivek Sethia, Managing Director, Vardhman Group, said, “The government expenditures primarily target the general public, particularly those classified as Below Poverty Line (BPL). While these individuals may not be our prospects, however, due to the pyramid effect money flows upstream and reaches to those who are our actual buyers, so this definitely impacts real estate positively.”

Ashok Kankariya, Director, Sumeet Group, Raipur, believes that whenever money comes into the pockets of common people in this way, the market's vibrancy and activities also increase. People purchase things they need. In total, this will lead to an increase in consumer spending. Moreover, this is also good for the industry.

Meanwhile, Anand Singhania, MD- Avinash Group and VP-Credai National, said that the government spending will help most of the industries and the real estate industry will get positive impact because people will have surplus money and they would be investing in property because that is a secure investment.

Industry players also pointed out the media channels and platforms they believe will be most effective for advertising their products, given the potential increase in media spends by the government and political parties.

Tiwari emphasised that newspapers serve as a prime platform for advertisers and media agencies, offering both a vast audience reach and a high level of credibility.

“In the world of print media, a common principle prevails: "winner takes it all". Typically, leading players in this arena enjoy the most significant advantages and Dainik Bhaskar Newspaper, being the largest and most dominant newspaper across these three states, is poised to continue to grab lion share of the extra media spends,” he added.

Sethia pointed out that television, social media and print will be the most important ones.

Kankariya believes that each media channel and platform has its own utility. Each media is also effective in its respective fields.

Meanwhile, Singhania said, "Digital media is the best platform for our promotion purposes. Sometimes, when launches come into the picture, we need to do 360 degree marketing on radio, newspaper, digital media and OOH.”

While speaking about the intensifying competition and challenges within the industry, Sethia said that selling is highly correlated with advertising. More the advertisements, the greater is the reach and higher the sales. With all sectors bombarding, distraction is bound to happen. Competition will be on offer not only from the real estate sector but also from others as well.

"In the market, there are continuously new challenges and increasing competition. For this, marketing planning needs to be done carefully and thoughtfully. Every player will need to stay updated," Kankariya said.

Singhania said, “Certainly, with the escalating media spends, it's evident that competition is on the rise. Businesses are actively promoting their brands, which inevitably enhances brand visibility.”

Industry players also spoke about how second and third players in their industry can take advantage of the economic stimulus measures compared to market leaders and what strategies they should consider.

“When the economy is booming or market sentiments are positive, everything sells. Products with lesser brand value or real worth are traded at par with market leaders,” Sethia said.

Kankariya emphasised that in order to move forward in the current scenario, attention must be given to various activities. The industry must engage in healthy competition while conducting business.

According to Singhania, the second and third players should not only establish a strong market presence through media but also focus on improving their customer services and product quality.

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