The ad industry seems to have no qualms about the recent budget. Industry professionals believe that the recent excise hike that the budget imposed on several categories of goods, among which figure FMCGs, automotive and consumer durables, is unlikely to prove a dampener to advertising fortunes in the coming year.
In the past a rapid rampup of prices courtesy government levies has led to slow offtake of goods which in turn has led to a reduction in ad spend by advertisers. Ad agencies have in the process seen their billings dry up.

Industry professionals however don‘t think the scenario will be replicated this time around. Says Saatchi & Saatchi media head T.V. Shivkumar: "The hike in excise rates won‘t in anyway have an effect on the ad spend of companies. There is no blanket increase in the price of commodities. The ad spend has got more to do with the bottomline of the company, whether it is able to keep its commitment with its shareholders."

What needs to be seen is whether consumers will react similarly to the situation. Will they cut back or postpone consumption like they did in the early nineties which led to reduced ad expenditures? If they do react negatively, the ad industry will be caught unawares like in the nineties when they overstaffed and overcommitted resources in the hope of good economic growth.

Star TV India is on the prowl for a dot com chief. The company is scouting around for an individual who will steer its forway in to the Wide World of the Web and e-shopping and communities. It is beleived to be in conversation with several senior executives and placement agencies have been roped in to lasso the right candidate for the job.
The company already has a portal startv.com. It plans to create many more portals and has set up a subsidiary for the Internet business, which will also offer Internet access. It is looking for partners in New Delhi to provide broadband Internet access through cable networks.

The company plans to get into the broadband area and offer webcasting services.Star TV CEO Peter Mukerjea does not want to miss the bus which the arch rival Zee Telefilms has already boarded. Zee Telefilms has a clear advantage with its own cable network SitiCable. It is already conducting pilot projects in Bangalore and Mumbai for Internet over cable.

Star expects to also form a community of Internet portals which it will likely offer along with access. The company is also looking at forging alliances with existing portals by taking equity positions in dot com startupps.

The Hinduja-run cable TV service IN CableNet today denied allegations about the pressure tactics used by them in the Sion-Matunga-King Circle area in Mumbai that made 32 of its operators shift loyalties to the rival SitiCable. Mr Hingorani, CEO of IndusInd Media and Communications said "The allegation is baseless and malicious. We don‘t use any force or pressure tactics and would never do so."
Company officials said that IN CableNet had set up a state-of-the-art control room in King‘s Circle in Mumbai and six small time cable ops who were unable to match the level of service decided to part ways.The company claimed that the allegations of browbeating and bullying and were made by a couple of ops who had defrauded the company of Rs 5 million and that police cases had been filed against them.

The cable war will spread in the country and such incidents will be frequent. Every MSO claims to be non-political and non-goon based. If that was the scenario why do the skirmishes keep popping up every now and then?

Budget 2000 was as insipid as they come for the television industry. Finance minister Yashwant Sinha did not fulfill the expectations of industry professionals by putting entertainment (read broadcasting) on a par with the infotech business. He cold-shouldered their proposal to allow them to divest just 10% equity like infotech stocks apart from giving them the benefits provided to the infotech sector. The industry will now have to look for succor from the Broadcasting Bill draft which information and broadcasting minister Arun Jaitley is supposed to present to Parliament in March. What Sinha however handed out were sops of a different kind: lowering of customs duties on cinematographic equipment from 40 per cent to 25 per cent and on basic film and jumbo rolls from 50 per cent to 5 per cent. This is expected to buoy both the film and studio businesses.
The increase in the foreign institutional investor limit from 30 per cent to 40 per cent is expected to benefit mostly the infotech and media and entertainment industries as these have emerged as darling stocks of the FIIs in the past six-seven months.

Sinha attempted to give a boost to the infotech business by reducing customs duties on finished computers and even components. He reduced customs duty on microprocessors, memory devices CD Roms, ICs and Display tubes from 15 per cent to 10 per cent. He additonally cut customs duty for computers from 20 to 15 per cent, motherboards 20 to 15 per cent, floppies 20 to 15 per cent.

A negative impost announced that was expected to hurt software companies may not end up hurting them so much after all. The tax burden on them will end up at around 3% thanks to the announcement that 20 per cent export income of all companies would be taxed.

Some attractive dollops were dished out to the Venture capital firms too to encourage them to crop up. Among the measures announced were:

* SEBI to be the nodal agency for venture capital funds to encourage entrepreneurs.
*One time tax of 20% on venture fund investor and undistributed income.
* No approval of venture capital fund by tax authorities.
* Venture Capital Fund income tax free if distributed within the period set by SEBI.

This is expected to give a boost to the Dot com sector as VCs may be encourage to set up operations in India as against the overseas subsidiaries they have set up so far. There were some initiatives on the telecom front: Customs duty on fibre optic cable has been slashed from15 per cent to 5 per cent. This will benefit cable TV companies too and it may encourage them to go in for fibre optics for their trunk lines. Customs duties on cellular phones has been reduced from 25 per cent to 5 per cent. This is expected to encourage the spread of handphones to even lower income classes.

An impost that will likely hurt is the increase in excise on fast moving consumer goods from 8 per cent to 16 per cent. This will lead to a hike in prices of products by the FMCG majors which in turn could affect their performance in an already competitive market. The stock market expects growth to slow down further and their revenues to reduce. This in turn could affect their ad expenditures as advertising is what companies first cut down. This could lead to more cautious spending on television advertising which in turn could affect the performance of certain television companies.

An announcement which could work in the favour of some infotech and media firms is the increase in the ceiling on automatic approval for overseas investment by Indian companies from $15 million to $50 million. One may see them go on an acquisition spree.