India's advertising sector, long hampered by economic challenges and sluggish growth, may see a turnaround thanks to new budgetary allocations on Tuesday, industry hopes.
Ringing in the true era of ‘coalition politics’, the first budget of Narendra Modi 3.0 government went the extra mile for Bihar and Andhra Pradesh, with Nirmala Sitharaman listing out a flurry of monetary help and projects for both states.
The Finance Minister promises an initial allocation of Rs 16,000 crore for Andhra Pradesh and Rs 25,000 crore for Bihar, aiming to stimulate consumption and create a more attractive investment climate. More funds are promised in the coming years. Also, the waiving off of Angel Tax is expected to boost the startup ecosystem.
The substantial investment in these states along with other growth-oriented provisions in the budget is expected to generate significant economic activity leading to an increase in disposable income and thus lifting the consumption, potentially increasing ad spend in these regions, industry experts believe.
Industry hopes that an immediate boost of such initiatives will come from the state and central governments, which may splurge money on media to popularize these initiatives and take credit.
However, these publicity measures are likely to continue till the upcoming Assembly polls in five major states, including Maharashtra (Oct 2024) and Bihar (Oct 2025) where the coalition governments are in power.
Industry is also looking at the long term gains as special allocations of Rs 41,000 crore will have enormous potential in the coming months.
Ahmed Aftab Naqvi, Global CEO and Co-founder of GOZOOP Group, notes, “The Rs 15,000 crore allocated for Andhra will boost Amaravati’s status as Andhra’s IT hub, positively impacting the advertising industry. Similarly, the Rs 26,000 crore for Bihar’s infrastructure will create ample opportunities for advertising growth.”
Ashish Bhasin, Founder of Bhasin Consulting, adds, “Not just special allocation to Bihar and Andhra, the entire budget is growth-oriented, with measures to increase disposable income, boost consumption, and stimulate ad growth. This includes employment initiatives, tourism focus, and raising the Standard Deduction in the new tax regime from ?50,000 to ?75,000. If the monsoon is also favorable, the ad industry should see substantial growth.”
Shradha Agarwal, Co-Founder and CEO of Grapes, highlights the budget’s commitment to infrastructure and technology, which is expected to enhance trade, commerce, and investment in Bihar and Andhra Pradesh, thus improving state GDPs and supporting ad industry growth in the long term.
Echoing the sentiments, Sajal Gupta, CEO of Kios Marketing, emphasizes that the budget’s regional focus will drive economic growth and urbanization, fostering a favorable investment environment and potentially increasing M&A activities.
Veteran adman Dr. Sandeep Goyal, MD of Rediffusion, however, remains skeptical, calling the allocations “political packages” that may result in little more than self-congratulatory ads from the government.
While things do look promising, experts warn that the full impact on the advertising sector will become clearer, depending on the successful execution of the planned projects and their subsequent effects on regional economic activity.
