29 February marked an important date in the year's calendar as Indian Finance Minister Arun Jaitley presented the Union Budget 2016, amidst expectations from all sections. With an aim to give equal attention to all sectors that need financial assistance, Jaitley presented the nine pillars of his budget that focused on multiple subjects; from eCommerce to start-ups; from education to increasing jobs; and from agriculture to health.
In a quest to find out what it really means for the media and entertainment industry, Indiantelevision.com reached out to several industry stalwarts to find out how they interpret the Union Budget 2016.
Here’s what they have to say:
M&E Tax Advisory India, EY, partner and head Rakesh Jariwala
“As part of the budget proposals, India has levied an equalisation levy - what is known as ‘google tax’ globally. The tax @ six per cent of the consideration will apply on services relating to online advertisement, provisions on online ad space or other facility or services for the purpose of online advertisement, when such services are provided by a non-resident to either an Indian resident or a non-resident having a permanent establishment in India. The payer for these services are required to deduct 6% prior to making the payment. This is the first time that online services are being taxed in India.”
Videocon director Anirudh Dhoot
“The Finance Minister presented a balanced budget with a focus on infrastructure and agriculture sectors. By keeping the fiscal deficit target to 3.5 per cent of the GDP, the budget addresses long term positive impact on businesses. For consumer durable and home appliances industry specifically, the budget brings mixed responses. While the focus is more on dispute resolution and simplification of provision, the voluntary income disclosure will dampen the market. The government has lowered the corporate tax for new manufacturing units at 25 per cent with a view to promote industrial activity and generate jobs. With regard to small units having a turnover of Rs 5 crore, the corporate tax rate has been reduced from 30 per cent to 29 per cent. However, there is no relief on the corporate tax for big manufacturers. Government has stressed on GST implementation and proposed changes in customs duty to push make in India initiatives, which is aimed at improving the overall business environment.”
Sony Pictures Networks India CEO NP Singh
“From an overall budget perspective, the enhanced public spending through various social schemes and infrastructure investments should further help to expedite economic growth. The government has also balanced spending with fiscal prudence by reigning-in fiscal deficit. From a media industry perspective, there were no major changes. I feel that a change in the definition of industrial undertaking for the services industry as well as a push to define the GST roadmap would have been sector-positive. There is a landmark attempt in the budget to simplify the tax administration, which should herald a friendlier tax regime.”
Dentsu Aegis Network South Asia CEO and chairman and Posterscope & MKTG - Asia Pacific chairman Ashish Bhasin
“Overall there are some positives and some negatives in the budget. Not increasing the service tax is a positive, particularly for the advertising and media sector. The general expectation was that Service Tax may go up in anticipation of higher GST rates. Controlling the fiscal deficit and several steps to invigorate the rural economy and rural consumption are positive signals. A rural consumption revival will help the economy and the advertising and media sector tremendously. On the negative side, there was an expectation based on what the Finance Minister said in the past, that corporate tax rates would come down. That is not to be so for most large companies. Introducing double taxation on dividends is also a negative. In balance this seems to be a mixed bag budget with a positive bias. If it is able to spur overall economic growth, we could see good times ahead for the advertising and media sector.”
Times Network CEO and MD MK Anand
“Digitisation, in my opinion is the most important factor for the broadcast sector currently, we are very happy about the excise duty changes proposed for set-top-boxes, which will help in the last mile infrastructure of Digital Addressable System (DAS) Phase 3 and 4. Overall, a stable and positive fiscal situation is good for the economy and that will support our ad sales growth projections. All in all budget 2016 looks good for the Broadcast sector.”
Viacom18 Group CEO and National Media and Entertainment Committee CII chairman Sudhanshu Vats
“Kudos to the government for presenting a disciplined and inclusive budget. The emphasis on rural development and commitment to the fiscal deficit target augur well for the economy in the long-run. The proposal for a more conducive excise duty regime for STBs and other ‘entertainment-access devices’ is welcome. While many of us from the industry were anticipating more sector-specific announcements, I’m sure that this budget will benefit the larger economy and therefore, by extension, have a positive impact on our industry as well.”