‘A progressive Budget that will boost marketing & advertising’
The Union Budget presented by Finance Minister Nirmala Sitharaman on Tuesday evoked a spectrum of responses from experts from the marketing and media sector, with some lauding it as a positive and promising outlook for the future of digital advertising, others expressing displeasure over it for giving M&E, including online gaming, a miss. Industry experts shared their thoughts with exchange4media on the Union Budget.
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Angel tax (i.e., tax on startups raising capital at a premium) has been finally abolished. Tax on long-term capital gains arising from the sale of shares of startups has been effectively brought down to 12.5%. It has been brought at par with listed shares, finally achieving the long-awaited parity.
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The budget is good for economic growth. India will continue to shine. There is no specific mention of the Media and Entertainment sector but I see ad revenue growth due to all the macro factors. Job creation schemes, skulking, inclusive growth, focus on rural growth, simplification on taxation and fiscal deficit coming down all indicate a stronger economy leading to increased consumption - which in turn is good for advertising numbers. Chandan Kumar, Senior Manager, Research and Strategy, Times Group Ambika Sharma, Founder & Chief Strategist, Pulp Strategy. Karan Taurani, SVP, Elara Capital We have not seen any kind of tax rationalization for the cinema industry or any kind of change in GST as such. There is nothing that has come from a regulatory standpoint in terms of tax for the radio industry or for the TV industry. Because these segments are regulated, they are paying hefty amount of tax on regulations; the radio industry specifically is paying a hefty license fee. So, I think it is more of a neutral to negative Budget. Amit Khatri, Co-Founder, Noise The Union Budget 2024 presented by Finance Minister Nirmala Sitharaman is a visionary step towards inclusive growth, with a strong emphasis on manufacturing, upskilling, and women empowerment. The establishment of e-commerce export hubs in a PPP model is a significant step and will empower MSMEs and traditional artisans to compete internationally. It will open opportunities for Indian players to boost their reach globally while enhancing the ease of doing business and accessing new markets. Harsha V Agarwal, Vice President & Managing Director, Emami Limited The Union Budget 2024 is a progressive and balanced budget. It focuses on multiple sectors including agriculture, rural development, MSMEs, women, employment and skill development is anticipated to spur the economic growth. With a clear emphasis on capital spending to generate growth and a strong focus on employment along with some of the tax benefits, we expect consumption to improve. Further, simplification of personal tax is also a very welcome move. Somdutta Singh, Founder & CEO, Assiduus, Investor & Ex-Member Niti Aayog The reduction in TDS from 1% to 0.1% for e-commerce operators, is a significant relief for sellers. This change will enhance their working capital flow, allowing them to reinvest in their businesses more swiftly. By reducing the tax burden, sellers can maintain better liquidity and manage their cash flows more effectively. This move will particularly benefit SMEs that rely heavily on timely access to funds for day-to-day operations. Furthermore, the establishment of dedicated e-commerce export hubs will be a visionary step towards boosting online trade. Yasin Hamidani, Director, Media Care Brand Solutions. Measures, such as removing the angel tax and reducing import duties on essential commodities like mobile phones and precious metals, are likely to stimulate the startup ecosystem and consumer markets. Overall, the budget balances tax relief, investment in critical sectors, and job creation, setting a positive trajectory for India's economic growth and development. Krishnarao Buddha, Senior Category Head, Parle Products Budget 2024 emphasizes key aspects like generating employment, skilling India, enhancing skilled manpower, and supporting MSMEs and the middle class. The focus on employment generation and skilling, including wage support and EPFO contributions for new hires, will create numerous opportunities for the youth. Additionally, the plans for housing, internships, and tax reforms are commendable. Reducing corporate tax and increasing the tax slab exemption will likely attract foreign companies towards India and increase disposable income for the middle class. Overall, one can expect this budget to result in increased savings for consumers, a conducive environment for spending, improved lifestyles, and greater prosperity for the country." Akash Agrawal, Co-Founder, Zoff Foods The government’s decision to invest over 3 lakh crore rupees in the skilling of women and girls is a commendable initiative, this will open avenues for them to empower their skills and make significant contributions across various industries. Additionally, the government’s move to establish an e-commerce export hub is applaudable as it will definitely help various players from segments like FMCG, consumer goods and others to expand their reach internationally. Shradha Agarwal, Co-Founder and CEO, Grapes The budget focusing on bolstering the employment prospects for women and youth is indeed a positive move as it will equip them with valuable skills, enabling them to contribute more effectively across industries, foster innovation, and boost productivity. The proposed allocation of Rs 1.48 crore for skilling can play a pivotal role in boosting job opportunities across the country. The changes in the new tax regime are a welcome step by the government, providing a major relief to the salaried class. The tax reliefs will pave the path for a coexisting ecosystem that will benefit both the organization and employees at the same time. Priyanka Salot, Co-founder, The Sleep Company This year’s Union budget signals a positive and holistic framework, especially for the startup sector. The Finance Minister emphasized on the participation of women in the workforce, which points to the creation of an environment encouraging women entrepreneurship and innovation. The Economic Survey 2023-24 indicates that India's e-commerce industry is projected to surpass the $350 million mark by 2030. The establishment of e-commerce hubs and reduction of TDS rates for e-commerce operators will provide a significant boost to the growth of D2C sector. It will also enhance the efficiency of their operations and enhance market accessibility, including that of exports. Prashant Puri, Co-Founder & CEO, AdLift, a global digital marketing agency It's great that the budget has many promising schemes for the youth regarding internships, employment-linked incentives, etc. This aligns with India's vision to become one of the top three global economies. Financial support for higher education loans up to ?10 lakhs is an excellent push, knowing the more significant population of this country falls between 18-40 years of age group. This will help the youth study at some of the best institutes for higher education and add to the country's growth in becoming the world’s 3rd economy from 5th. Vaibhav Gupta, Co-Founder and CPO, KlugKlug The Union Budget 2024-25's focus on digital infrastructure and ease of doing business is a positive step for the advertising and marketing sectors. The review of the Income Tax Act and the simplification of capital gains taxation will reduce compliance burdens, allowing businesses to focus more on growth and innovation. The proposed decriminalization of delays in TDS payments and the reduction of TDS rates for e-commerce operators are welcome changes that will enhance operational efficiency. M&E experts from the legal fraternity too shared their views: Aarushi Jain, Partner (head - media, education & gaming), Cyril Amarchand Mangaldas The budget gives M&E, including online gaming, a miss. Given that funding in M&E has been slow recently, the industry can benefit from incentive schemes and tax rebates for its continued growth. The government has announced the withdrawal of the 2% Equalisation Levy on the consideration received for e-commerce supply of goods or services, with effect from 1st August, 2024. This measure is likely to provide relief to digital companies in terms of additional tax cost, reducing litigations and uncertainties. Kritika Seth, Founding Partner, Victoriam Legalis – Advocates & Solicitors The budget seems to be moving in the direction of providing some promising possibilities in the M&E industry especially in terms of technology innovation.
Vishal Shah, Managing Partner, EssenceMediacom
This will foster investments in startups across sectors and enable a boost in marketing and advertising budgets as we see more unicorns from India in the times to come.
Partho Dasgupta, Managing Partner, Thoth Advisors and ex CEO, BARC India
Digital news publishers were hoping that the government will create a level playing field in the media sector by waiving goods and services tax (GST) as news serves the public good. The current GST imposed on digital media is unfair compared to what print media pays. There is no justification to pay such high GST rates. For digital media subscriptions, the GST is 18%, while print media does not pay this rate on subscriptions. Instead, print media only pays GST on advertisements.
As we reflect on the Union Budget 2024, the government's forward-thinking approach to digital advertising, MSMEs, and the services sector is encouraging. The significant focus on enhancing digital infrastructure and incentivizing the adoption of advanced technologies such as AI, AR, and VR is a significant boost for the digital advertising and transformation segment. These initiatives will not only foster innovation but also create a robust ecosystem for targeted and impactful marketing in the times to come.
In summary, the Union Budget 2024 presents a well-rounded strategy that supports digital transformation, stimulates consumption, and accelerates business growth across sectors. It is a positive and promising outlook for the future of digital advertising and the broader economic landscape.
Ritika Nayyar, Partner, Singhania & Co.
Tags : Union Budget Nirmala Sitharaman Media Industry M E Sector