KOLKATA: Tax reliefs, lower customs duty, input tax credits, better scope for foreign direct investment (FDI) were among the many hopes that the media and entertainment industry had pegged on a budget “like never before.” But the pandemic-hit industry has not received any specific supportive measure in this session. The only silver lining is the hope of a positive consumer sentiment, and higher ad spend thanks to big push in infrastructure, healthcare, financial sectors.
Finance minister Nirmala Sitharaman announced that Rs 20,000 crore has been provisioned in the budget to capitalise Development Financial Institution (DFI) for infrastructure financing. Insurance companies can now have FDI as high as 74 per cent, an increase from 49 per cent, which has led to market gains for domestic insurance companies. The minister has also proposed to double healthcare spending in the country along with other sweeping measures.
Against this backdrop, experts in the M&E industry are hopeful that it will transmute into higher spending by consumers as well as brands, pushing more subscriptions and higher advertising revenue.
“According to me, this is a great budget for the economy as well as for the advertising industry. It is clearly a growth-oriented budget and I am particularly enthused about the investments in infrastructure and health. What is also good is that the taxes have not been raised and the process of taxation has been attempted to be simplified. Disinvestments and borrowings have been proposed as the preferred funding route, rather than increased taxation, which is helpful,” Dentsu APAC CEO, India chairman Ashish Bhasin comments.
“Whenever the economy does well, the advertising industry benefits. Hence, I feel this economic growth that the budget fuels will result in good growth for the advertising industry this year and we should be positive and bullish, both about India’s economic future as well as for the advertising industry,” he adds.
DDB Mudra Group COO and CFO Anurag Bansal is also optimistic about the prospects of the budget due to no negative tax on corporates, no Covid cess. “Overall, Indian economy’s recovery from the impact of Covid2019 has been much better than expected, leading to a spectacular bounce back in consumer sentiments. Advertising and media stand to gain as the economy picks up momentum and clients resume their spends. And with the focus of Budget 2021 on capital expenditure and nation building, it augurs well for consumers, markets and businesses,” he states.
Top-notch executives from leading broadcasters have also expressed positivity around the market sentiment. “A big boost to the Aatmanirbhar Bharat vision observed in #Budget2021. The huge impetus to infrastructure is indeed a positive step and will certainly propel growth.The measures announced by the FM will surely help in a swifter recovery, with a sharp focus on job and demand creation,” ZeeL MD and CEO Punit Goenka writes on Twitter.
Indian Broadcasting Foundation president K Madhavan terms it as a “growth-oriented” budget. He contends that the focus on privatisation and providing support for start-ups and innovation is likely to benefit the overall corporate sector and in-turn help M&E industry on the back of strong advertising growth.
Elara Capital VP – research analyst (Media) Karan Taurani also believes that the advertising spend will move up. Additionally, nothing negative has come out from the budget for other heavy spenders like FMCG sector, which could be helpful too. The government has also announced privatisation of couple of banks which could lead to higher ad spend in banking sector. Although no direct step has come out of the budget, these couple of factors will help the M&E sector, he believes.
If the investment cycle is back with positive market sentiment, the M&E sector will gain in terms of both subscription and advertising revenue as more people will have more money in their wallet, Kurate Digital Consulting’s Uday Sodhi says. He adds that if all of these positive reforms are implemented within the next year, the economy will revive faster than expected leading to better recovery of M&E.
