Budget 2024: M&E players want FM to push consumer spending, tax sops & growth plans
The Union Budget is days away and the media and entertainment sector is abuzz with expectations and anticipation around what Finance Minister Nirmala Sitharaman has to offer the nation. While the advertising sector seeks more spending power for consumers, broadcasters and OTT players are hoping for relaxed regulations and the government’s support in content production.
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According to industry observers, India’s media and entertainment (M&E) industry is thriving, propelled by the increasing popularity of OTT platforms, the government’s backing for digital infrastructure, and a sustained passion for cinema. While various tax reforms have been implemented over time, several pressing issues remain and that require attention in the upcoming Union Budget.
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The M&E sector encompasses film, television, digital streaming and many more verticals. exchange4media spoke to several experts to take stock of their expectations from the budget which is scheduled to be released on July 23. Adland expectations According to market experts, a key expectation from the budget is stimulating consumer spending which will fuel the advertising industry. Vinay Hegde, Chief Executive Officer- Investments, Madison Media, said, “Anything that will drive economic expansion and increase disposable income and stimulate consumer spending, will in turn fuel the advertising industry and hence is what is the key expectation from this budget.” Sharing a similar view was Ashish Bhasin, Founder, The Bhasin Consulting Group: “I hope and anticipate for the upcoming budget to be growth-oriented. When the economy and GDP growth do well, so does advertising. If more money is put in the pocket of consumers through tax incentives etc, the better it is for the advertising industry,” he said. He added that if advertising does well, so will the broadcasters. “TV is a very important medium, especially for the rural markets. If advertising does well, it automatically positively impacts the growth of broadcasters/ television mediums. If the government incentivises good content, it will boost the growth of the broadcast sector. Considering the talent in India in terms of story-telling capabilities, production ability and content creation, if encouragement is given, we can be global players in this area. Hope there is something for this sector in the budget,” he said. Experts also feel that advertising should be treated as an investment and this shift in perception will help in long-term brand building. According to Hiren Gada, WTD & CEO, Shemaroo Entertainment Ltd, “The growth of the media and entertainment industry relies on consumers' ability to spend on leisure and entertainment. To increase disposable income, focusing on boosting employment through nationwide programmes and reducing the tax burden to enhance discretionary spending are essential. Additionally, incentives for emerging industries, favourable tax policies, and support for tech and R&D can sustain a healthy start-up ecosystem." According to Kaushik Das, Entrepreneur and CEO of AAO NXT, advertising agencies also face hurdles with the existing TDS framework, which impacts their cash flow due to TDS being applied to the gross billing amount. “Lowering the TDS rate on payments from advertisers to these agencies would help ease this financial strain.” “Additionally, payments to foreign satellites and data centres are presently classified as royalty or fees for technical services, making them subject to withholding tax. Clarifying that these payments are not taxable in this manner would greatly assist M&E companies utilizing these services,” Das said. Expectations of OTT players & digital marketers Akshay Bardapurkar, Founder of Planet Marathi OTT, suggests providing subsidies to filmmakers and web series creators due to the widespread shooting locations across India for web series. This subsidy would encourage and support production in the digital medium. He suggested, “Creation of a separate ministry under the Ministry of Information and Broadcasting (MIB) dedicated specifically to digital mediums like OTT platforms. This ministry would oversee regulations, funds, and policies tailored to the digital content landscape. He proposes the introduction of a new act under the Cinematography Act specifically addressing digital filmmaking, with a separate budget allocation for these purposes.” As for, Kaushik Das, Entrepreneur and CEO of AAO NXT, "The M&E industry is flourishing, bolstered by the surge in OTT platform usage, governmental support for digital infrastructure, and the ever-growing enthusiasm for cinema. Despite numerous tax reforms introduced over the years, several critical issues remain that must be addressed in the upcoming Union Budget. “OTT platforms, in particular, have become a cornerstone of the M&E industry, revolutionizing how content is consumed and distributed. The government’s continued support for digital infrastructure is crucial in sustaining this growth. However, the sector faces specific challenges, such as the need for clearer regulations around content and taxation policies that reflect the unique nature of OTT services. Streamlining these regulations would not only enhance compliance but also encourage further investment in the sector.” Budget sought for R&D Experts called for improved and incentivized policies towards digital infrastructure especially in areas of artificial intelligence (AI) & machine learning (ML) which could lead to better adoption of these technologies. Shemaroo’s Hiren Gada said "Looking ahead to the Union Budget 2024-2025, we anticipate a budget that not only sustains our growth but propels us towards new horizons. The allocation of funds and providing financial incentives to stimulate research and development in technology, especially artificial intelligence, for the media and entertainment sector will be beneficial. This could include grants, tax credits, and subsidies for businesses engaged in innovative tech solutions.” Mautik Tolia, Managing Director, Bodhitree Multimedia Limited is hopeful for measures that will boost our global competitiveness. “Our expectations would be to increase the subsidies on international productions to attract more business. Special tax SOPs to be given to the VFX and Animation industry on their international work orders. We expect the establishment of a dedicated fund by the government to boost content creation and the media technology space, with a special focus on investing in AI and content creation, keeping the international markets as the target." Madison’s Vinay Hegde said, “Specifically, what the GOI proposes for building digital infrastructure and literacy and the rapid advancement and adoption of emerging technologies like AI, AR and VR, which has the potential of providing a transformative landscape for advertisers will provide the necessary impetus.” Expectations of film industry Akshay Bardapurkar, Founder of Planet Marathi OTT, highlighted the concerns about the GST (Goods and Services Tax) burden on the film industry, advocating for a reduction in GST rates to alleviate financial strain on filmmakers. He proposed revisiting income tax policies to introduce separate tax brackets for lesser-known artists, crew members, and senior citizens in the industry. “This adjustment aims to support individuals who may not earn as much as prominent artists,” he said. Karan Taurani, Senior VP, Elara Capital, also called for a potential cut in GST in the film industry. “There is potential for a GST reduction because the cinema industry is struggling with footfalls. Instead of companies resorting to price cuts to attract audiences and thereby taking a hit on margins, a GST relief could significantly benefit the exhibition sector, including multiplexes,” he said.
Tags : Fm Budget 2024 M E Nirmala Sitharaman