Category: Budget 2017

Industry hails doubling of digital allocation

MUMBAI: One of the key points that came out of Finance Minister Arun Jaitley’s Union Budget 2018-19 was the focus on Digital India. The allocation was doubled to Rs 3073 crore and the budget was clearly beyond wooing voters.

The government has decided to increase digital intensity in education and technology will be the biggest driver in improving quality of education. Jaitley aims to move from blackboard to digital board schools by 2022.

About Rs 14.34 lakh crore is to be spent on rural infrastructure. According to the budget, five lakh Wi-Fi hotspots will be setup to provide broadband access to five crore rural citizens, at the cost of Rs 10,000 crore.

ALTBalaji CMO Manav Sethi said, “It’s a great effort from the government if it’s executed well for connectivity. It is easier but more relevant to connect small villages and towns in India on Internet rather than roads. This connectivity has the potential to impact not only India’s entertainment options but their means of livelihood, healthcare and education.”

HAL Robotics MD Prabhakar Chaudhary says that the government has understood the need and capability of technology. “It’s great to see that the government is recognising future technology for building the nation’s future. Not only does this help in job creation but also advances the nation in competitive global space.”

Instappy founder & MD Ambika Sharma believes the move with empower society in areas like broadband and mobile connectivity. “Furthermore, the allocation of Rs 10,000 crore for the five lakh WiFi hotspots to provide broadband access to five crore rural citizens is also promising. With nearly 70 per cent of the country’s population living in rural and semi-urban geographies, the move will give the vision of a digital India a big boost and provide businesses an opportunity to upscale.”

Staqu CEO and co-founder Atul Rai believes that this year’s budget has not only taken significant steps towards the digital India vision but also towards inculcating the latest technologies like artificial intelligence for the national development. He said, “With NITI Aayog to establish a national programme for artificial intelligence, we look forward to supporting the nation with R&D support and more programmes like ABHED which is already assisting the polices forces with AI capabilities. With the advent of new technologies and the Indian government being equally eager to adopt them, we strongly foresee the nation to be on the road to transformation and emerge as one of the leading digital nations on the world map.”

Said BARC India CEO Partho Dasgupta: “Budget 2018 is clearly focussed on driving rural sector growth. This should result in higher rural incomes and therefore higher standards of living in rural India. Our baseline study indicated that economic prosperity and higher living standards go hand in hand with TV penetration and higher TV consumption. With only 2/3rd of Indian homes having access to TV, there is huge headroom for growth here, and this year’s budget should help drive up TV ownership and consumption in rural India. As head of a tech-driven research company, I am also excited to see government’s focus on machine learning, artificial intelligence and other such technologies of the future. One dampener for industry is the hike in basic customs duty on certain electronic equipment including LCD/LED/OLED screens, which would make TVs more expensive. Our barometers too are likely to get more expensive, and this will raise burden on industry for our planned panel expansion.”

Contradictory to that, nexGTv COO Abhesh Verma opines thinks that doubling the budget for the digital India scheme will be emerging as a major move towards assisting the nation to progress further. He commented, “The second development of investment of Rs 10,000 crore for rural Wi-Fi hotspots, giving five crore citizens access to broadband speed internet by the deployment of five lakh Wi-Fi hotspots should help bring more consumers online, increasing digital consumption of services like OTT, entertainment, banking, and e-commerce. We at nexGTv feel that all these steps are a definite plus for the significant growth of the digital businesses in the country.”

In the same track, News18.com editor language Nidheesh Tyagi feels that Arun Jaitley has really shown this government’s serious emphasis for digital India. He said, “An extra Rs 10,000 crore is provided to bring 50 million people through five lakh wifi hotspots in rural areas to this side of the digital divide. I am sure much of this action is going to happen in languages. We hope to see more use of digital payment through mobile spreading in the tier 3 / 4 towns and villages besides more connectivity on mobile, broadband and access to government services. Digitisation of agricultural markets will also benefit some 300 million farmers.” But he feels that more could have been achieved by reforms in telecom sector.

Haptik founder & CEO Aakrit Vaish has a similar opinion as Rai. He commented, “With NITI Aayog to establish a national programme for AI, this will not only significantly aid job creation but will also assist the government to move towards its vision.”

Government will take measures to stop cryptocurrency circulation, as it is not considered legal tender. Jaitley proposes use of blockchain technology to encourage digital payments and curb the use of cryptocurrencies, setting up of a national programme to encourage AI and providing easy internet access to villages.

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February 2, 2018

Digital industry celebrates Union Budget 2018

MUMBAI: The Union Budget for 2018 that was finally unveiled yesterday turned out to be a rather disappointing one for the industry at large but Digital India and digitisation got prime time attention. The budget focused on the middle class and rural population, guided by the mission to strengthen India’s agriculture, rural development, health, education, employment, MSME and infrastructure sectors.

With a view to promote digitisation, the government is set to make the necessary investment in robotics, internet of things (IoT), artificial intelligence (AI), digital manufacturing and big data analysis with the NITI Aayog to establish a national programme to direct efforts in artificial intelligence. The government has committed itself to the development of technology along with concentrating on AI and its applications, a revolutionary move for the digital industry. The ministry has decided to double its Digital India budget to around Rs 3073 crore.

The Indian media industry seemed to have mix reactions about this year’s budget and while some were disappointed, many seemed cheerful about it and considered it to be a welcome budget.

Like the last few years, 2018 Union Budget too saw a dry spell for the entertainment industry with no big announcements. However, the government’s Digital India push by proposing to set up 5 lakh WiFi hotspots in the rural areas will pave the way for greater consumption of entertainment and news related content. It will also provide a boost to regional content, which is already expected to grow multifold in the coming years. Overall I would say the biggest positive highlight of this year’s budget was focused on agriculture and healthcare. This initiative will definitely help the marginalised part of our country in the long run.

Dharma Productions CEO Apoorva Mehta

It was an expected budget. I think that it was widely believed the government would focus on the rural economy and so it came to pass. There was not much expected for the media and entertainment industry and there was nothing specific announced. Corporate India would be slightly disappointed though as corporate taxation was not reduced except for small enterprises. Aviation and farming were the big winners.

Mukta Arts managing director Rahul Puri

Budget announcements signal a stronger ecosystem for media and broadcast industry. In continuation with my pre-budget expectations, I am happy that FM has kept his promise by reducing corporate tax rate to 25 per cent.

BTVI COO Megha Tata

While the budget largely focuses on the upliftment of agricultural sector, there is an equal focus on technology by introducing national programme in the area of AI & exploring ways for using the blockchain technology for digital transactions. The emphasis on sectors like healthcare, education & skill development is a good step by the govt. Reforms in the education sector encourage more & more private institutions to expand or modernise to give students a more global perspective as part of their learning process, which also helps in tackling brain drain. Overall, the budget seems like a typical socialist one, without much to take-away for the common-man.

Havas Media Group CEO India and South Asia Anita Nayyar

I’m glad to see that the budget for digital India has doubled and also the fact that AI and Blockchain technologies will be used by the government. But I’m disappointed that government is looking to put an end to cryptocurrencies. Globally cryptocurrencies is a phenomenon which points towards the future of currencies and maybe a more inclusive view was needed.

WATConsult founder and CEO Rajiv Dingra

The budget has focused on the right areas, particularly the rural and agricultural sector, which is definitely going to spur rural demand in the coming months and years. The rural economy needed a boost. I also like the fact that the Finance Minister has focused on ease of living rather than just ease of doing business and has introduced healthcare benefits which will benefit nearly 50 crore Indians. It is a landmark step. The emphasis on digital, particularly higher-end digital areas like artificial intelligence and usage of blockchain shows that the government is committed to providing a further digital thrust. The steps being taken, like provision of free WiFi and other forms of internet to all parts of the country will be extremely beneficial in the long run for the digital sector. It will help agencies like ours who are partnering clients for digital transformation.

The introduction of the long term capital gains tax on equities will soon be digested by the industry I’m sure, but in some ways, I see a missed opportunity because the simplification of GST processes for the services sector would have gone a long way to help the advertising industry. The advertising industry doesn’t mind paying the taxes but abhors non-productive, complex procedures including filing of hundreds of returns every year. Overall I think the right sectors have got the incentives and therefore it should be good for the country. If it is good for the country, it will be good for the economy and once the economy grows, the advertising sector will benefit from it.

Dentsu Aegis Network chairman and CEO South Asia Ashish Bhasin

The ‘Digital India’ program has received a major boost with double the allocation of Rs. 3073 Crore for the coming year. Budget 2018 has proposed the set-up of 5 lakh Wi-Fi hotspots in rural areas thereby providing broadband access to 5 crore rural citizens. Much to the delight of digital media players, this move will open extended avenues for them and give a strong push to regional and mainstream digital content in these markets. With extensive broadband penetration, affordable data prices and smartphones, the vision for digital India could well come to fruition in the coming years. Lastly, the estimated over 7% growth for the next fiscal creates a positive sentiment for India’s economic and financial ecosystem.

Worldwide Media CEO Deepak Lamba

In the Union Budget 2018, there has been a significant allocation towards rural development. The proposal of setting up 5 lakh Wi-Fi hotspots in rural areas will give impetus to media penetration in Tier 3 and Tier 4 markets. Media players are increasingly looking at Tier 2, Tier 3 and Tier 4 markets since regional content has begun to drive media growth. So, the infrastructure push in these regions will accelerate media consumption and inadvertently help the advertisers and the advertising business on the whole. I would certainly say it is a good budget, and we will gradually witness the positive results unfold in the future.

TV18 president- revenue & Forbes India CEO Joy Chakraborthy

Government’s focus on rural and agriculture development, digitisation and digital education is going be a big demand booster for our sector. The rural demand for FMCG, beverages, automobiles, education and financial products are going to increase, this would increase advertising budgets of our clients from FMCG, education, financial services sectors. Government’s focus on digitisation brings in lots of rich data for us to better targeting for our customers. This focus would make India data rich country and the targeting and conversions on digital marketing front would be much easier and more accurate.

Vertoz fand CEO Ashish Shah

FM Jaitley’s budget this year focuses on investments to be placed in artificial intelligence, machine learning and the Internet of Things with the NITI Aayog establishing a national program to direct efforts in artificial intelligence. The government has committed itself to the development of technology along with concentrating on AI and its applications which is a revolutionary move for the digital industry. Initiatives on infrastructure growth and education expansion have been looked at from a digital perspective, which reflects the significance of the ‘Blackboard to digital board’ movement. Decisions benefiting rural citizens–such as 5 lakh WiFi spots, give it a further impetus. Another game changer mentioned in this budget was the government’s will to proactively explore the use of blockchain technology. The allocation of digital India has been doubled which indicates the government’s emphasis on digital, heralding a stronger digital economy. I believe this was a great budget for the digital ecosystem.

DAN Performance Group CEO Vivek Bhargava

The much-awaited announcement of Union Budget prompted a gust of anticipation & higher expectations. While the Finance Minister touts the Union Budget as primarily focused on the agricultural sector, it sure reeks of reforms beneficial for numerous other sectors as well.

The government has always encouraged the digital sector to flourish & the budget rightfully justifies their farsighted approach. This year the allocation to Digital India Scheme has been doubled to Rs 3073 crore which is a worthwhile move for the industry as a whole. Not only that, with the onset of fast-paced technology and AI shaping the new segment of digital World, NITI Aayog will establish a national programme for it. This is a clap-worthy reform which will help organisations diversifying with AI to have a wider scope with vast awareness among everyone. For a higher internet penetration, 5 Lakh Wi-Fi hotspots will be set up in rural areas, which again is beneficial for the rural dwellers. The need to eliminate cryptocurrencies which are funding illegitimate transactions was also mentioned. The government has proposed to revamp the system of sanctioning loans to SMEs. As per the budget reforms now the information will be linked with GSTN & will be fetched from the same. This comes across as a welcome move as not only will it streamline the process but will enable people to get accustomed to the digital ingress. Corporate companies with a turnover of up to Rs 250 crore will also be highly benefitted from the budget as the corporate tax has been further reduced to 25 per cent.

As per my opinion, the Union Budget has surely set a benchmark & the year looks promising with excellent reforms leading to growth & development of the economy.”

iCubesWire CEO and founder Sahil Chopra

This is an excellent budget from the digital perspective. As expected, the government has doubled its allocation to digital India initiative at Rs 3073 crore. This will grow the entire digital economy and the government has shown that this is going to be focus area. Its commitment to exploring blockchain and AI only ratifies its vision for digital India. The other game changer is enhancing rural regions with 5 lakh Wifi hotspots. This would lead to higher adoption, skills upgrade and rural citizens embracing digital quickly. This budget gives me hope that we are on our way to becoming a digital-led economy.

Tonic Worldwide founder and CEO Chetan Asher

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February 2, 2018

Union Budget 2018: Populist budget fails to excite industry at large

MUMBAI: The Union Budget finally arrived today with all eyes fixated on Finance Minister Arun Jaitley. He presented his fifth Union Budget, which was also the last one for the Modi government before India sets out to choose its new prime minister next year. Riding on optimism, different research firms, news broadcasters and media companies kept speculating for about a month on what exactly should this year’s budget hold for India.

While the Union Budget 2018 was essentially a populist budget as Lok Sabha elections are due next year, it turned out to be a rather disappointing one for the advertising and media industry but it was a big thumbs up for Digital India and digitisation. The budget focused on the middle class and rural population, guided by the mission to strengthen India’s agriculture, rural development, health, education, employment, MSME and infrastructure sectors.

With a view to promote digitisation, the government is set to make the necessary investment in robotics, internet of things (IoT), artificial intelligence (AI), digital manufacturing and big data analysis with the NITI Aayog to establish a national programme to direct efforts in artificial intelligence. The government has committed itself to the development of technology along with concentrating on AI and its applications, a revolutionary move for the digital industry. The ministry has decided to double its Digital India budget to around Rs 3000 crore.

The ministry has also proposed to set up 5 lakh Wi-Fi hotspots to give access to 5 crore rural citizens, which means digital and internet penetration into smaller pockets of the country will result in increased data consumption across India. The move will help brands, agencies and OTT players to create target content for such markets.

In a move to regulate the cryptocurrency market in India, Jaitley said that the government would take essential measures to eliminate the use of crypto assets in financing illegitimate activities. He, however, maintained that the Indian government will explore the use of block chain technology proactively to usher in the digital ecosystem.

Jaitley also announced the allocation of Rs 10,000 crore for creation and augmentation of telecom infrastructure. He also noted that micro, small and medium enterprises (MSME) are a major element for growth and mass formalisation of the MSME sector is slated to happen after demonetisation and GST, which took place in 2016-17.

In what turned out to be the world’s largest government-funded healthcare programme, Indian ministry will launch health scheme to cover 10 crore poor families. The flagship national healthcare protection scheme of the government will provide upto Rs 5 lakh per family per year for secondary and tertiary care hospitalisation of members.

The television and handset companies did receive a blow as mobile phones are now set to become costlier as the custom duty on them has been increased to 20 per cent. The move comes with an aim to promote the government’s ‘Make in India’ initiative.

Customs duty on crude edible vegetable oils such as groundnut oil, safflower seed oil has been hiked from 12.5 per cent to 30 per cent while on refined edible vegetable oil it has been hiked from 20 per cent to 35 per cent. Customs duty on imitation jewellery’s been increased from 5 per cent to 15 per cent in 2016 to 20 per cent now with duty on sunglasses, cigarette lighter, toys, bus and truck tyres, select furniture also seeing a similar hike. The import duty on smart watches, wearable devices, footwear has now been doubled to 20 per cent whereas the duty on LCD/LED/OLED panels has been hiked to 15 per cent. The import of solar-tempered glass for manufacture of solar cells will be exempted from customs duty.

While the health and education cess has been increased to 4 per cent, the aam aadmi who was positive about having to pay less tax will be disappointed as the government did not propose any change in the tax slabs for the salaried class this year.

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February 1, 2018

Industry holds bright outlook for budget 2018

MUMBAI: With the D-Day already here, the media and entertainment industry is keeping its fingers crossed after a difficult year that bore the full brunt of the introduction of GST. With things settling and the general elections not too far away, a more populist budget is expected from FM Arun Jaitley and his ministry this year. While all eyes will be on the fiscal consolidation roadmap and borrowing plans, the government’s action plan for ease of doing business will be in sharp focus.

Indiantelevision.com asked industry veterans for their views on what’s likely to transpire during the mega event today. This is what they had to say:

“This is the last budget before the general elections, I think it will be a populist and a good budget. It should help the spending and the overall industry which will directly help advertising.

Broadcast industry went through a major cyclic process when demonetisation and GST happened. With helping the advertising industry this budget will bring good growth to the media industry as well. It will also help in increasing the consumption, expenditure.

Over the sentiment will get better, India as a country is very sentiment driven. If the budget is good, the general public will also be happy and half the things are taken care.”

— TV18 president-revenue & CEO Forbes India Joy Chakraborthy

“Entertainment and media industry is not just a participant but also carrier of digital revolution in the country. Therefore, policy makers should step up to rationalise the taxation aspects impacting digital ecosystem. Towards this end, clarification may be provided on applicability of Rule 9A of the Income Tax Rules to income from sale of digital rights of feature films certified for theatrical exhibition. Also, with the growth in production, distribution and consumption of ‘web only’ content, provisions similar to those for feature films may be applied or at least clarity may be provided on its deductibility as revenue expenditure.

Though India is one of the large cinema markets around the world when it comes to admissions, the market in tier II and tier III cities still remains underserved given the limited number of screens. A weighted deduction may be provided for developing, maintaining and operating single screen theatres or multiplexes in such tier II and tier III cities.

GST was introduced with an intention to subsume multiple taxes levied by the State and the Union. This had come as a major relief to all the industries including the media and entertainment industry, with of course, industry discomfort on the rate of GST is undeniable. However, many states (like Tamil Nadu and Gujarat) have started imposing local body entertainment tax on movies. Levy of local body entertainment tax on movies exhibited defeats the whole purpose of GST. Therefore, the government should either remove the levy in itself or at least put a minimum cap on exhibition of movies.”

– PWC partner-India entertainment and media sector leader Frank Dsouza

“Now that the GST jitters are receding and GDP growth rebounding to 6.3 per cent in Q2 of FY 2017-18, I am confident about growth of broadcast industry in FY 2018-19. Having said that, I wish to see average GST rate for media and entertainment sector be brought down from existing 18 per cent to pre-GST levels of 15 per cent. I am hopeful about Finance minister keeping his words by reducing the corporate tax rate from 30 per cent to 25 per cent as promised by him in the union budget 2015-16 speech.”

— BTVI COO Megha Tata

public://Vikas Khanchandani.jpg “The M&E industry will continue on its exponential growth path as we get high speed data connectivity and the corresponding data costs continue to decline. Data growth has risen on the back of high video consumption on the go and will continue to play a pivotal role for growth in both M& E and Telecom sectors. Keeping in mind the expected growth, one long -pending wish I have from the Budget is the recognition of the M&E industry as an integral part of the Infrastructure sector so that it can avail of the various benefits and incentives that are given to the Infrastructure sector. This includes better financing options, to help boost the capital investments needed in digitisation and digitalisation, technology upgradation and new technology development and deployment. The net benefit of all of the above will always flow back to the consumer.”

— Republic TV CEO Vikas Khanchandani

“To realise the Digital India dream, it is important to promote broadband. MSO are the best to roll out faster Broadband being already have fibre reaching homes, building, society etc. Being high capex requirement of business, the industry expect that Budget will give relief to Industry by removing the AGR.”

— GTPL Hathway Ltd head-investor relations Piyush Pankaj

public://Rahul Puri.jpg “The budget for 2018 will be a greatly important budget as the elections for 2019 are only a year away. I think there will be some changes to the direct tax structure this year as indirect taxes were given the biggest ever overhaul last year in terms of the introduction of GST. I also feel that there will be increased spending on infrastructure likely to be announced this budget as the government looks to employ some populist measures with one eye on elections.
As for the entertainment industry, I hope some clarity comes through on GST with relation to multiplexes as it’s important that the industry sees consistency. I also am hopeful that as the government looks to help increase infrastructure capacity, the multiplex and retail segments get a much-needed boost.”

— Mukta Arts & Mukta A2 Cinema MD Rahul Puri

“Transparency was one of the declared objectives of digitisation and this has been achieved with the efforts and investments by MSOs and operators. Today, majority of the benefits of transparency flows to the government and broadcasters. It’s time that the government recognised the contribution of small entrepreneurs in establishing this industry, the reality that television is much more than entertainment, and the need to share the benefits of transparency with MSOs, operators and consumers by way of overall reduction in taxes to the sector.”

— KCCL CEO Shaji Mathews

“From a personal standpoint this will be an interesting budget to see how economic reforms and political compulsions are balanced. But from an industry stand point I’m hoping that digital transactions and e commerce get a positive deal and in effect making them further appealing to consumers. If done it will be a game changer for Digital India.”

— The Glitch co-founder and content chief Varun Duggirala

February 1, 2018

Union Budget 2018: Industry expects govt to favour consumption

MUMBAI: Union Budget 2018 has snuck up on us. This Thursday, the government will unveil its budget for fiscal year 2018-19 and many market watchers are expecting a slew of incentives for businesses. After a difficult year, some course correction is certainly on the anvil. Here’s what some of the leaders in the industry had to say:

“In the rapidly changing landscape, we believe that the distinction between telecom, IT and broadcasting technology has disappeared and that a convergence of these sectors is required. A positive consideration of this demand in the 2018 budget will certainly help in the rapid growth and generation of substantial employment in our country. Also, similar to the telecommunications sector, television broadcasting organisations including direct-to-home (DTH), cable services and headend in the sky (HITS) require huge investments in setting up technology and distribution networks and, as such, are ‘asset-rich’ organisations. Hence, just like in the software and telecom sectors, it is necessary to allow for the carry-forward of losses in the case of amalgamation or merger of companies in the broadcasting sector.

For the budget 2018, we are also hopeful that the government will issue a clarification stating that transponder hire charges are not ‘royalty’ in order to avoid protracted litigation.”

— Indian Broadcasting Foundation president Punit Goenka

“I anticipate that the Union Budget of 2018 will drive growth and whenever the economy grows, the advertising industry benefits. I see a particular thrust from the government in the areas of infrastructure development as well as for rural development. We have had a reasonably good monsoon, rural economy is starting to look up and another push in the same direction will significantly benefit all consumption-led sectors, including FMCG, which are heavily advertised.

I think the government will make efforts to ensure that there is more money in the pockets of the common man, hopefully by giving some relief on the income tax front and will use technology for better tax compliance, thereby keeping the fiscal deficit under control. The fiscal deficit is very important from the point of view of controlling inflation.

Specifically for the advertising industry I hope that there are some simplifications around the services part of GST that are announced. While GST has been a progressive step for the country, my feeling is that the services sectors were relatively less focused upon and hence the step that was supposed to simplify indirect taxation has actually ended up complicating it significantly, particularly for advertising agencies that operate out of different cities and states and service clients who may be based all over the country. Under the thrust of the government for ease of doing business, I hope this issue gets addressed. The advertising industry doesn’t mind paying the taxes but needs simplification of processes, which are taking away too much of unproductive manpower and blocking working capital.

Over all I feel that India is poised to see good economic growth over the next 10 years and a little bit of help from the government policies, through the Union Budget of 2018 will further help the economy outperform the rest of the world.”

— Dentsu Aegis Network chairman and CEO (South Asia) Ashish Bhasin

“The announcement of Union budget is just around the corner with discussions & debates being conducted around it. There is hush-hush regarding the assumptions when everyone is expecting a positive release. As far as digital is concerned, besides the allocation of budgets on Digital Infra Development, there is a need to initiate a few reforms. Digital is the fastest growing sector of India and should be highly benefitted from the Union Budget.

As per my understanding, budgets should be allocated to PSUs for investing in digital marketing. This will lead to a win-win situation as for the organisation the digital mediums will help gain recognition and support. While the digital agencies will spread awareness and educate the audience about the benefits of the organisation. Even the digital organisations paying taxes dutifully should be recognised well and given the right opportunities to flourish.

Even on a personal level, the entrepreneurs who are platinum taxpayers should be given certain advantages as a reward for their contribution towards the nation. Any individual paying heavy taxes on time should be entitled to such benefits which could be in the form of a card similar to the other identity cards we have. This will not only be a welcomed move, but it will also ignite the zeal among the others to be a part of that category thereby benefitting the country.

However, what the budget is going to be will be interesting to witness and I hope for some reforms that help the digital sector in various ways.”

— iCubesWire CEO and founder Sahil Chopra

“Given the NDA Government’s strong intent to drive reforms, we definitely anticipate some rationalisation in tax structures and strengthening of related infrastructure. While the GST council has already taken some proactive measures, we hope the Government will reemphasize on a roadmap for simple and business friendly GST compliance and administration systems. More importantly, over the course of next few months, initiate all necessary constitutional amendments to ensure that there are no other State or Local Body Taxes, as they defeat the very purpose of bringing uniformity in tax structure, while ensuring proper input credit for taxes.

For the accelerated growth of the start-up sector and economy at large, it’s important that the push for digitisation should continue with more vigour. Initiatives by the Government including waving MDR on debit cards on transactions upto Rs 2,000 really go a long way in attaining this objective and we hope, on similar lines in post-budget period, rationalisation mechanisms are introduced around credit cards rates as well–which will continue to be a major mode of payments. UPI should be made more cost effective and should be given a much larger push to increase its adoption in India.

We do expect the Government to take up and address IT infrastructure and allied issues this year, taking into account some serious issues that are being faced by the entertainment/media sector such as Piracy. The IT laws must be strengthened to address the root cause for these issues that are constantly causing a substantial hit to the overall revenues for the sector.”

— BookMyShow head of finance Mitesh Shah

“In this budget, we look forward to the government focusing on the upliftment of the rural economy and job creation. 49 per cent of the Indian population is engaged in the rural economy. More money in their hands will lead to rebalancing of media spends by corporates that provide goods and services to the rural market. This will be a positive for the advertising industry.”

— iProspect India CEO Rubeena Singh

“India’s hospitality industry is one of the key drivers of growth of its service sector. With a turnover of USD 71.53 billion in 2016, it accounted for 9.6 per cent of GDP and was the third largest foreign exchange earner for the country. The sheer volume of business it is generating makes streamlining GST on hospitality imperative for Budget 2018.

Government has somewhat eased its taxation policy by downward revision of rates or rationalization of tax slabs, however, a more detailed approach for resolving issues that still plague GST is required. For instance, IGST in not available to Hotels, tax is calculated on declared rather than actual tariffs, luxury travel and stay are taxed at considerably higher rates, food and beverages sector suffers from the loss of input tax credit, all of which increase costs for end-users and subliminally disincentivises consumption. With experts predicting overall industrial growth between 100 and 200 per cent in next couple of years, 2018 should see a significant expansion in HORECA industry; hence it would be highly beneficial if government would fuel this growth with some planned tax benefits.

Hotel industry is highly capital intensive. Granting infrastructure status to this sector would enable hotels secure long term loans at competitive rates, which would help reduce room tariffs. Facilitating loan availability to small and medium enterprises under Mudra scheme with easier accessibility and larger outlays and granting tax benefits to remote businesses can further help the industry.

In addition, leading hospitality industries around the world revolve around a core group of highly skilled individuals – an area where India still lacks. Benefits of creating and maintaining a talent pool of skilled manpower would be significant. Were government to allocate some portion of the budget to this area, it would go a long way in making India the global leader in the hospitality sector.”

—Pursuite.com CEO Amit Shukla

January 30, 2018

Guest Column: M&E sector pins hopes on a developmental budget

The market size of the Indian media and entertainment (M&E) sector is estimated to be in excess of USD 20 billion. India has more than 180 million television households and approximately 900 television channels (including news and current affairs). The country also produces the highest number of films–around 2,000 films every year in more than 20 languages.

The key sub-sectors under M&E include (1) broadcasting, (2) print, (3) films, (4) sports, (5) radio, (6) music, (7) digital advertising, (8) out-of-home advertising, (9) animation and VFX, (10) gaming, (11) live events. The M&E sector is expected to outpace GDP growth in 2018. Now, with everyone’s eyes on Budget 2018 proposals, the key expectations of the sector are outlined below:

Mergers and amalgamations

Industrial undertakings are allowed to carry forward tax losses in case of merger or amalgamation. The definition of industrial undertaking, includes manufacture of computer software, providing telecommunication services. However, the sector (including broadcasting, radio) has not been included in this definition. Accordingly, the benefit of tax losses is currently not available for M&E players in cases of consolidation.

On account of evolving business models (including moving to a B2C model), there is a thrust on consolidations within the M&E sector. Considering this and the convergence of the broadcasting and radio sectors with telecommunications, the government should consider including broadcasting and radio under the definition of industrial undertaking for carrying forward tax losses. This would facilitate consolidations in broadcasting and radio.

Infrastructure status

Broadcasting is capital intensive and requires huge investment of funds on account of digitisation, upgrade of technology and infrastructure architecture. Currently, broadcasting is not granted infrastructure status and the government should consider granting such status to the sector. This, amongst others, would aid financing for future growth and help the sector achieve its potential.

Foreign direct investment (FDI) in print

Currently, FDI in print (news and current affairs) is capped at 26 per cent. This sector is trying to deal with the impact of digitalisation. Considering the trend of liberalising the FDI policy and sector’s needs for investment in digital assets, the government should consider increasing the FDI cap for print to 49 per cent. This would help in attracting foreign funds into the sector.

Transfer pricing

Safe harbour is a mechanism under which tax authorities accept the transfer price (under certain circumstances) declared by the taxpayers, without undertaking a detailed audit/scrutiny. The scope of safe harbour transactions has been enlarged in 2017 to provide certainty to taxpayers and transactions such as provision of software development services for IT/ITeS sector are part of the safe-harbour regime. However, transactions specific to the M&E sector are currently not a part of the regime.

The government should consider including the transaction of distribution of content by an Indian company to its overseas group company under the safe-harbour regime. This would provide relief to M&E players in terms of obtaining certainty from a transfer pricing perspective.

Withholding tax

Over the last couple of years, the government has been forthcoming in terms of clarifying tax positions (for instance expense deduction for abandoned films, withholding tax in respect of advertising contracts and content transactions) by way of circulars to avoid litigation. Outlined below are a few issues that the government should consider clarifying the withholding tax position to reduce litigation:

· Channel placement fees: The government should consider clarifying that such payments do not amount to royalty/fees for technical services considering the Bombay high court decision on this issue.

· Live broadcast rights: Clarifying that such payments do not amount to royalty/fees for technical services should be considered based on the Delhi high court and Mumbai tribunal decisions on this issue.

· Transponder fees: The government should also consider clarifying that a non-resident taxpayer can claim the benefit under a tax treaty for transponder fees and domestic tax law explanation of the process should not be imputed to the tax treaty definition of royalty.

Goods and services tax (GST)

Services by way of admission to exhibition of cinematograph films is subject to GST at 18 per cent or 28 per cent, depending on the price of the ticket. In addition to GST levied by state and central governments, the right to levy and collect tax has also been given to local authorities and this right continues even after implementation of GST. It should be ensured by the government that such local bodies do not levy additional tax on exhibition of films. If levied, a corresponding reduction in GST rate should be granted.

The M&E sector is at the cusp of exponential growth opportunities but to achieve such growth trajectory, the support of the government reforms is of utmost importance. Hopefully, on 1 February 2018, when the Budget proposals are presented, we would take a significant step in that direction.

Thakkar is Partner and Bhojwani is Director with Deloitte India. The views expressed are personal and Indiantelevision.com may not

January 30, 2018
Rs 12 billion budgeted for ‘Digital India’ ’17-18

NEW DELHI: With the Government’s emphasis on cashless and paper-less working, electronic governance gets the highest chunk of Rs 4.0055 billion out of the overall budget of Rs 12.1642 billion set aside for Digital India for 2017-18.

Of the total allocation for electronics governance, Rs 3.8555 billion has been set aside as programme component.

According to the budget for the electronics and information technology ministry, the objective of e-governance is to deliver all government services electronically to the citizens in his/her locality through integrated and inter-operable systems via multiple modes, while ensuring efficiency, transparency and reliability of such services at affordable costs.

The World Bank supported India: e-Delivery of Public Services project is an externally aided project under Electronic Governance Scheme under which financial support is extended for various e-governance initiatives of the Centre and States/UTs in the broad areas of policies, human resources, technology, project development, etc.

Manpower development gets Rs 3.0676 billion while the National Knowledge Network has been allocated of Rs 1.5 billion.

The objective of manpower development is to ensure availability of trained human resources for the manufacturing and service sectors of electronics and IT industry. Initiatives include identifying gaps emerging from the formal sector and planning programmes in non-formal and formal sectors for meeting these gaps.

The National Knowledge Network has been initiated with multiple gigabit bandwidth to connect Knowledge Institutions across the country

Promotion of electronics and IT HW Manufacturing (MSIPS, EDF and Manufacturing Clusters) will get Rs 7.45 billion. The ministry says electronics manufacturing is one of the important pillars of Digital India Programme and target to achieve net zero imports is a striking demonstration of intent.

Ministry sources said the demand for electronics hardware is expected to rise rapidly and India has the potential to become an electronics hardware manufacturing hub and contribute significantly to the GDP, employment opportunities and exports.

For Promotion of IT/ITeS Industries, the total allocation is Rs 60 million while Cyber Security Projects (NCCC & Others) get Rs 210.8 million.

Two schemes (NEBPS and IBPS) under IT for Jobs pillar have been launched under Digital India Programme to incentivise BPO/ITES operations across the country, particularly digitally deficit areas for creation of employment opportunities for the youths and the balanced regional growth of IT/ITES Industry.

The objective of the Cyber Security scheme is to adopt a holistic approach towards securing the cyber space of the country by pursuing multiple initiatives like Security Policy, Compliance and Assurance, Security, Incident-Early warning & Response, Security Training, Security specific R&D, Enabling Legal Framework and
Collaboration.

A sum of Rs 1.01 billion has been set aside for research and development in IT/Electronics/CCBT. Proliferation and absorption of emerging technology by supporting R&D is one of the important objectives, apart from creating essential R&D infrastructure and scientific & technical human capital.

The allocation for Foreign Trade and Export Promotion is a mere Rs 30 million to reimburse Central Sales Tax (CST) to Electronics Hardware Technology Parks (EHTP) and Software Technology Park (STP) units according to the Foreign Trade Policy.

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February 11, 2017
Ravi Shankar too hopes DTH will support Swayam

NEW DELHI: Communications and Information Technology Minister Ravi Shankar Prasad has expressed the hope that said linkage with direct-to-home platforms will help the ready-to-be-launched Swayam platform with at least 350 online courses.

This will leverage information technology and enable students to virtually attend the courses taught by the best of the faculties present in the country, access high quality reading resources, participate in discussion forums, take tests and earn academic grades.

Prasad in a statement described the budget as “A Digital Friendly Budget aimed at accelerating India’s Transformation into a Digitally Empowered Society”.

He said the Digital India initiative of the government had transformed the digital profile of India significantly. Investments in electronic manufacturing which was just Rs 110 billion in June 2014 has increased to Rs 1278.8 billion.

The production of indigenous LCD/LED TVs went up by 38 per cent to 12 million units in 2015-16 as compared to 8.7 million units in 2014-15.

LED products made in the country earned Rs 35.9 billion in 2015-16, showing a growth of 65 per cent over 2014-15 when the earning was Rs 21.72 billion.

Similarly, 110 milion Indian mobile handsets were produced in 2015-16, showing a rise of 83 per cent over the previos year 2014-15 when the production was 60 million units. With 72 new mobile handset and component manufacturing units set up in last two years, India has emerged as a mobile manufacturing hub. The growth in mobile handsets in value terms means a growth of 185 per cent, having risen to Rs 540 billion in 2015-16 as against Rs 189 billion in 2014-15.

The number of telephone users in the country had grown from 950 million in June 2014 to 1080 million mobile phone users. He listed some of the other achievements of the Digital India programme:

·   Bharat Net: Optical Fibre Network to connect villages of India has seen rapid growth. In June, 2014 only 358 kms of optical fibre was laid. In January, 2017 1.72 lakh kms of optical fiber has been laid across more than 76, 000 Gram Panchayats.

·   MyGov: A new platform created for participative governance now has over 40 lakh registered users.

·   Aadhaar Holders: From 63 Crore Aadhaar holders in 2014, India today has 111 Crore Aadhaar holders.
·   Common Service Centers: To provide digital services to common people in villages the Common Services Centers were created. In June 2014, only 83,000 such centers were active across the country, which has now increased to 2.05 lakh centers.

·    Jeevan Pramaan Portal: A new initiative to provide convenience to pension holders was created which now has 56 lakh registered pensioners.

·    Digi Locker: A new initiative to provide safe online document storage to citizen now has more 42 lakh users. More than 165 Crore digital documents have been issued by the Government in these lockers.
·   Scholarship Portal: Online scholarship was easily made available to the students. 1.4 Crore students have registered under this.

·   Online Hospital Appointment: Online appointment services in 60 major hospitals have been started. Total 47 lakh appointments have been taken online.

·   eNAM: Online National Agriculture Market was created so that farmers can get the best price for their produce. Today more than 8.5 lakh farmers have registered on this portal.

·   Growth in Digital Transactions: eTaal portal which measures the digital transactions of various eGovernance services has seen a rapid growth:
·   In 2013- 66.25 lakh transactions per day
·   In 2014- 96.9 lakh transactions per day
·   In 2015- 1.85 crore transactions per day
·   In 2016- 3 crore transactions per day

· Computerization of Land Records: Land records have been computerized in 31 states and Union Territories. Record of Rights (RORs) made online for 22 States/UTs. Bhu-Naksha/ Map digitization done for 15 States/UTs.

· Digi Dhan Abhiyaan: To promote digital payments across the country, Digi Dhan Abhiyaan was launched in December, 2016. Under this effort of the Ministry, more than 2 Crore people and 7.18 lakh shopkeepers were trained in digital payments across 5636 blocks of 640 districts.

Speaking on the relevance of the Union Budget 2017-18 to Electronics and IT sector, Prasad said, “As India is now on the cusp of a massive digital revolution, promotion of a digital economy is an integral part of Government’s strategy to clean the system and weed out corruption and black money. It has a transformative impact in terms of greater formalisation of the economy and mainstreaming of financial savings into the banking system. This, in turn, is expected to energise private investment in the country through lower cost of credit.”

“Digital Economy aims for speed, accountability and transparency. We are also creating an eco-system to make India a global hub for electronics manufacturing. Over 250 investment proposals for electronics manufacturing have been received in the last 2 years, totalling an investment of Rs 1260 billion. A number of global leaders and mobile manufacturers have set up production facilities in India. A shift to digital payments has huge benefits for the common man. The earlier initiative of our Government to promote financial inclusion and the JAM trinity were important precursors to our current push for digital transactions”, he added.

Digital Inclusion remains of central concern to this Government. In order that people in rural areas are able to access quality services, the Government has announced that a DigiGaon initiative will be launched in order to provide tele-medicine, education and skills through use of digital technologies. For senior citizens an Aadhar based Smart Card containing health details will be introduced initially on a pilot basis in 15 districts in 2017-18. This week the Cabinet has approved a scheme for digital literacy for 6 crore rural households– Prime Minister Gram Digital Saksharta Abhiyaan PMGDISHA which will be strengthened through the network of the Common Service Centre. We expect that this will further open up opportunities for livelihood in digital arena in rural areas. It is to be noted that CSCs have generated employment opportunities for over five lakh youth in rural areas.

He said the recently launched BHIM App by the Government will unleash the power of mobile phones for digital payments and financial inclusion. So far, over 140 lakh people have adopted the BHIM app. The Government will launch two new schemes to promote the usage of BHIM; viz., Referral Bonus Scheme for individuals and a Cashback Scheme for merchants

Aadhar Pay, a merchant version of Aadhaar Enabled Payment System, will also be launched shortly. This will be specifically beneficial for those who do not have debit cards, mobile wallets and mobile phones. A Mission will be set up with a target of 2,500 crore digital transactions for 2017-18 through UPI, USSD, Aadhaar Pay, IMPS and debit cards. Banks have targeted to introduce additional 10 lakh new PoS terminals by March 2017. They will be encouraged to introduce 20 lakh Aadhaar based PoS by September 2017.

Keeping in view the need to promote cashless transactions, exemptionfrom BCD, Excise/CV duty and SAD on miniaturized POS card reader for m-POS, micro ATM standards version 1.5.1, Finger Print Readers/Scanners and Iris Scanners been brought down to nil. Simultaneously, exemption is also extended to parts and components for manufacture of such devices, so as to encourage domestic manufacturing of these devices. I am sure you will notice that there are a number of other measures that are aimed at improving the ease of doing business and also for encouraging start ups.

The focus would be on rural and semi urban areas through Post Offices, Fair Price Shops and Banking Correspondents and cooperative sector. Support has been provided for NABARD for computerisation and integration of all 63,000 functional PACS with the Core Banking System of District Central Cooperative Banks. This will be done in 3 years at an estimated cost of Rs 1,900 crores, with financial participation from State Governments. This will ensure seamless flow of credit to small and marginal farmers. The coverage of National Agricultural Market (e-NAM) will be expanded from the current 250 markets to 585 APMCs. Steps would be taken to promote digital payments in petrol pumps, fertilizer depots, municipalities, Block offices, road transport offices, universities, colleges, hospitals and other institutions, such as using the recently launched BHIM App. A proposal to mandate all Government receipts through digital means, beyond a prescribed limit, is under consideration. Further, steps will be taken for linking of individual demat accounts with Aadhaar.

The Government is planning to introduce a new and restructured Central scheme – Trade Infrastructure for Export Scheme (TIES) in 2017-18. The allocation for incentive schemes like M-SIPS and EDF exponentially increased to an all time high of Rs 7450 million in 2017-18. Duties have been rationalized which will provide boost to manufacturing of LED lights and solar cells and modules.

Cyber Security being very critical for safeguarding the integrity and stability of the financial sector and one of the major factors behind the Digital drive, the government is setting up a Computer Emergency Response Team for the Financial Sector (CERT-Fin). This entity will work in close coordination with all financial sector regulators and other stakeholders.

Also Read:

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DTH channels being launched by September to impart education: Javadekar

Only Dish TV carrying HRD ministry’s educational TV channels

February 10, 2017
Budget ’17: SAP enables mid-sized cos to go digital

MUMBAI: Aligning to the Union Budget 2017, SAP SE announced the launch of SAP S/4HANA Private Cloud, the next generation business suite tailored for midsize companies, which will be available at a simple and affordable subscription pricing.

With increased impetus for digital, cashless transactions and a unified, transparent taxation regime, companies will need to gear up for rapid growth while balancing business control with the agility to capitalize on emerging opportunities. With SAP S/4HANA Cloud, private edition, midsize companies will benefit from the innovation, flexibility, and functionality of SAP S/4HANA enterprise management solution and derive the benefit of effortless scalability, ease of implementation and management.

The SAP S/4HANA Private Cloud will provide the perfect platform for businesses that are at the cusp of making strategic shift to digital. Available in a modular subscription pricing without any upfront capital investment, this solution offers enterprise-caliber data security and faster time to value allowing SMEs to go digital within weeks on predefined services.

“The recommendations in the Union Budget 2017 are tailored to accelerate growth for midsize companies,” said SAP Indian subcontinent president and MD Deb Deep Sengupta. “Our commitment, through SAP S/4HANA Private Cloud, is to provide each and every Indian business the opportunity to tap into the power and potential of SAP HANA as they pave the way towards a pervasive digital business.”

From standard business processes to deep industry-specific functionality, companies of any size can now take advantage of SAP’s 40+ years of experience delivering solutions for businesses in every industry.

February 8, 2017
Budget ’17: Rural net will facilitate travel bookings

MUMBAI: The union budget has broadly focused on themes such as the farming sector, the tourism industry, development of road network, and infrastructure. The high speed internet connectivity in rural areas will now be the biggest advantage to the travellers.

This is the first time the railway budget was merged with the general budget. One significant announcement was the fencing project on the Delhi-Mumbai and Delhi-Howrah routes which is expected to cost around Rs 45 lakh per km. Other announcements included track and signalling upgradation and elimination of unmanned level-crossings along the two major routes at an estimated cost of Rs 21,000 crore.

Royal Caribbean Cruises exclusive India representative TIRUN CEO Ratna Chadha said, “The union budget we hope will have a positive impact on the tourism industry which is a great employment generator, resulting in a significant multiplier effect on the economy. We are happy to see infrastructure development at airports in tier 2/3 cities, as most of the aspirational India resides here.”

Online travel industry enabler Travelyaari co-founder and CEO Aurvind Lama said, “The union budget presented a progressive outlook with due importance to infrastructure development and tech development. The investment proposed in building national highways along with developing road network is a welcome step.”

Lowcostdepartures.com’s new avatar Travkart.com co-founder Gursahib Singh Sethi said, “For increase in railway connectivity to the remote areas and upgradation of airports in Tier 2 cities, a huge number of people will be able to travel smoothly from Tier 2 and Tier 3 cities. The high speed internet connectivity in rural areas will be the biggest advantage to them. This will help them to do more purchasing and online bookings. Enlarging the tax exemption bracket would be a crucial factor in people’s saving. This will increase their budget to travel.”

Sales enablement services provider Denave global CEO & co-founder Snehashish Bhattacharjee said, “Union Budget 2017 is mostly in line with the long-term economic development strategy of the present government. For the retail/ FMCG segment, highway and road infrastructure focus will work well in tandem with the advantages of the GST implementation. This will also go a long way in allowing development of tier3/satellite towns closer to the Tier1/tier2 cities and thereby a little more even distribution of population across tiered cities and rural areas. The sops towards getting closer to a cashless economy (digitisation sops, BHIM app and Aadhaar Pay drive, removal of service charges on e-ticket booking etc.) will help get closer to the 3% fiscal deficit goal by FY’19.”

February 7, 2017