From providing a fillip to digital sector to withdrawal of customs duty on newsprint, here's what the sector is hoping for.
As Indian advertising and media industry emerges from the COVID pandemic, it is faced with exciting possibilities for growth. The rise in internet penetration coupled with rising digital adoption and sales of consumer durables like smartphones, are bringing hope and promise to the sector.
Ahead of Finance Minister Nirmala Sitharaman’s fifth Budget speech today, we speak to some industry experts on their expectations.
Shamsuddin Jasani, CEO, Wunderman Thompson South Asia
The fast-growing M&E sector will be the economy’s growth driver in future. We hope that the Budget will offer favourable policy measures and investment in digital infrastructure. We would like the Budget to boost the tech ecosystem, with a strong focus on increasing smartphone penetration.
We expect the Budget to provide a fillip to the digital sector, boost rural consumption and provide the necessary tax benefits and stimuli, such as bringing the GST on digital advertising at par with print advertising (reducing it from the current 18% to 5%).
I am also looking forward to investment in Open Network Digital Commerce (ONDC). It will revolutionise commerce in India and give a huge boost to the small ‘kirana’ stores and vendors.
Sivakumar Sundaram, chairman, executive committee, Bennett, Coleman & Company, and member and executive director, BCCL board
It’s important that fiscal policies support the print sector. Newspapers are the fourth pillar of democracy and have not yet recovered from the COVID-induced slowdown. It is necessary to ensure that duties and taxes that impact newspaper production, are rationalised to support the sector. A strong, credible and independent curated media is a necessity for a thriving democracy.
The newsprint industry has input GST (newsprint at 5% GST), but output that is in the form of advertisement, is taxed at 18% GST. This results in an inverted duty structure for print industry. Like the concession provided to the manufacturing industry, print should also be given the benefit of claiming excess input tax credit as refund.
The government should consider making input tax credit (ITC) fungible, i.e., allowing ITC of one state to be used against output tax of any state. This will release the blocked working capital and enable the industry to use it for investment and improving output.
The customs duty (5% on import of newsprint) should be withdrawn. It does not offer any support to domestic industry and is only a burden on the publishers.
The existing free trade agreement (FTA) should be continued, unaltered. FTA with different trading partner nations such as Malaysia, Indonesia and others, provide a duty benefit and we should consider adding more countries, especially from the western hemisphere.
The concessional duty given on printing presses and related machinery with a purpose to boost newspaper industry, should be continued.
Ashish Bhasin, co-founder and chairman, RD&X Network
I hope that it’s a growth-oriented Budget, because advertising benefits when the economy grows. As a rule of thumb, advertising tends to grow about 1.5 times the GDP growth.
Second, I hope that the government finds ways to put money into the pockets of particularly those consumers residing in rural areas as well as the urban poor. That is what will really serve the economy in these times of inflation.
The personal taxation rate has been ridiculously high over the last few years, thanks particularly to the surcharges that were introduced. It is now at the highest level (around 42%). It will be difficult to attract global talent at this high rate. There is a case for rationalising, at least the surcharges.
Last, the government has done a lot for digital infrastructure over the last few years. I hope to see this continue and grow. Digital is the future. Any initiatives that promote and facilitate digital startups and economy, will do the advertising and marketing industry a lot of good.
Abhay Ojha, CBO, Zee Media Corporation
The media sector should be given tax concession, along with an increase in foreign direct investment (FDI). Presently, digital news has 26% FDI, TV (49%), whereas the defence sector has around 100% FDI.
Private FM radio stations should be given news broadcasting licence for the overall growth of media. The increase in Internet usage has given life to web journalism. For its development, the web world needs public ads, just like TV and print media.
Public ads need to be regulated for healthy journalism. There is a need for regulation in ad distribution, as far as TRPs and other mediums are concerned. There is a need for financial aid or insurance for field correspondents covering life threatening events and emergencies.
Simran Hoon, CEO, QYOU Media India
The creator economy is pegged to be a Rs 2,200 crore industry over the next two years, according to a GroupM report. The community is young, talented and powerful. Influencers today have the power to aid further digital growth, especially in smaller markets. Relaxations in TDS for micro-influencers, can boost growth for this sector. Overall, well-defined guidelines for this community, will be a welcome move.
Chirag Gander, co-founder, The Minimalist
With 5G service rapidly penetrating throughout India, it is a perfect moment for businesses and brands to amp up their marketing ventures. I hope that this year’s budget encourages digital marketers with programs and schemes to invest in R&D of robotics and artificial intelligence (AI).