So what was the Budget like for M&E?

02 Mar,2015

 

A cross-section of captains of media and entertainment companies tell us how they found Budget 2015

 

Punit Goenka, MD & CEO, Zee Entertainment

This is indeed a futuristic and growth-oriented Super Budget presented by Finance Minister Arun Jaitley. It has addressed both the overall tax concerns, and portrayed a positive picture for the investor. It is a Budget to remember for the common man as well, since it has addressed all key aspects, like housing, jobs and education. Congratulations to Jaitley for wonderfully addressing the nation’s concerns through the Budget, and for setting some key goals for 2022

 

Tarun Katial, CEO, Reliance Broadcast Network

The Budget is positive, realistic and progressive in nature. Overall, it seems to be well thought of, with a holistic approach, and some key announcements for the services industry. The proposed reduction in corporate tax over the next four years is encouraging, as it will result in higher investments, growth and more jobs. The move to increase the service tax, however, will put smaller advertisers under pressure, and hamper advertising spends. The move on CSR is good, and radio can be used effectively as a catalyst for social transformation in initiatives like Swachh Bharat, since it reaches even the remotest of the corners [of the country] where no other medium can. This will be especially true with Phase III and deeper reach in radio.

 

Sudhanshu Vats, Chairman, CII M&E committee & Group CEO, Viacom18 Media

Two words sum up the essence of Budget 2015: Balance and clarity. Finance Minister Arun Jaitley walked the tightrope by staying away from Big Bang announcements that might have strained the fiscal position, while taking substantial steps on matters of tax, social security and public investment (especially in infrastructure). On the reduction in corporate tax rates to 25%, the four-year implementation roadmap is a welcome addition. This is the clarity the corporate sector needs so far as tax policy is concerned. While personal income tax slabs remain unchanged, higher exemptions are targeted towards savings and would add to retirement income in taxpayers’ wallets. These ‘wallets’ too, will have a different connotation given the FM’s vision for a cashless society. The reduction in withholding tax rates (to 10%) on royalty and FTS payments to non-residents has finally been granted. The increase in service tax is probably to bring the rate closer to the rates expected under the GST regime. In that context, the step is the proverbial bitter pill for our industry.

 

Smita Jha, leader, Entertainment & Media Practice, PwC India

The Budget has many references to the entertainment and media industry though there are no large announcements. The GDP growth target of an expected 8-8.5% will provide fillip to growth in the advertising industry. Clarity in the GST timetable is also significant, as entertainment tax being subsumed into GST will not only help bring uniformity in taxes across states, but also bring transparency in box office collections. There are many small reliefs provided to the industry, like exemption of the film exhibition industry from service tax thereby removing the possibility of dual taxation with the entertainment tax. Reduction in customs duty on import of digital cameras and accessories used for film production, will also help curtail production costs. The removal of certain entertainment activities from the negative list may, prima facie, seem unfavourable, but this will bring uniformity in taxation and thus be beneficial to the industry in the long-term.

 

Zafar Rais, CEO, MindShift Interactive

The new government’s maiden budget proposes to levy service tax for online and mobile advertising, which we believe will adversely affect the industry’s growth. It reflects differentiated treatment, as traditional print media remains unaffected with respect to the tax purview but the new, digital media that is actually driving innovation, will have to bear the brunt. Currently, India’s exponential mobile penetration and app consumption patterns are driving the growth of the mobile advertising industry, and this tax could hamper the innovation efforts of the entire ecosystem comprising mobile development startups, advertisers and publishers. We would have preferred a more future-focused policy regarding this particular aspect.

 

Sumit Jain, Co-Founder & CEO, CommonFloor.com

The move to allot Rs 1,000 crore to tech start-ups is only a reiteration of the government’s intent and purpose. The corpus, as such, is not substantial and we can only hope that there will be a fast and efficient disbursement of this fund. Jaitley also referred to a more liberal system of raising global capital and the ease of doing business, which are encouraging and would eventually create employment opportunities in the country.

 

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