Category: Budget

Budget ’17: Leading digital players hail sectoral boost

MUMBAI: “Digital economy helps in cleaning up the system, has transformational impact, energises private investment through low-cost credit, and benefits the common man,” asserted finance minister Arun Jaitley while announcing the Union Budget 2017 on 1 February. The budget 2017 emphasised a lot on the promotion of digital economy and strengthening the country’s cashless economy.

Apart from launching two new schemes, Referral bonus for citizens and cashback for merchants, the government has also announced the launch of Aadhaar Pay. For the financial year 2017-18, the government targets around 2,500 crore digital transactions through UPI, USSD, Aadhaar Pay, IMPS and debit cards.
The government’s focus on growing the digital footprint in India, enhancing digital infrastructure, capping cash transactions and enabling Aadhaar Pay crucial measures were laudable. Let’s take a look at what the digital, payment solution, e-commerce platforms and payment wallets have to say about the Union Budget 2017:

Hungama.com CEO Siddhartha Roy said, “Focus on digital infrastructure in the current budget is extremely encouraging. Greater reach of broadband and data services into urban and rural India will lead to an inclusive digital economy, encouraging more people to embrace digital, driving consumption and transactions across the medium. Better quality of data is also set to give an impetus to the digital entertainment industry lead by video which is certainly poised for massive growth.”
Payment Wallets: FreeCharge & Oxigen
Oxigen Services CMD Pramod Saxena says: “The budget 2017-18 reflects the government’s continuous efforts to move towards less cash economy and bringing transparency in value chain through digital payments & GST. The budget has stressed upon the importance of strengthening India’s digital economy by bringing down cost of digital infrastructure. The acceleration of PoS infrastructure with 10 lakh PoS machines by March 2017 and another 20 lakh Aadhaar-based PoS by September 2017 is a reflection of pushing digital payments at last mile by 300 per cent from the current base of 15 lakh PoS achieved so far in last 20 years. The decision to exempt duty on various POS machines will help in reducing cost of digital infrastructure implementation and benefit companies like Oxigen.”
FreeCharge CEO Govind Rajan shared: “FreeCharge welcomes the policy measures aimed at accelerating the adoption of a digital economy in India. The incentives for adoption of fintech equipment, expansion of digital infrastructure in under-served areas, Aadhar Pay for wider adoption by merchants and capping cash transactions at Rs 3 lakh, all together have kept the spotlight on building a less-cash India. In doing so, we will all help build a transparent and efficient future for our country”
Payment Solution Platforms: AGS & Telr

AGS Transact Technology group chief marketing officer Pratik Seal added, “The Union Budget 2017 has seen a host of incentives to boost India’s digital economy. However, the budget has not been a very populous one with incentives for the startup fraternity per se. Reduction of income tax for companies with a turnover of Rs. 50 crore to 25 per cent is a welcome move, and will aid many emerging companies. The three-year tax holiday in the first seven years (extended from five years) since inception of startups is a measure which will provide some relief to them.

Furthermore, he added, the surcharge of 10 per cent levied on individuals earning between Rs 50 lakh to Rs 1 crore may impact startups in the process of scaling-up, to attract senior talent on their usual cash and ESOP/stocks packages, as the taxation gap over and under the Rs. 1 crore mark is now practically non-existent. The instant gratification “of being in the Rs 1-cr plus CTC and still be in the sub Rs-1 crore tax bracket” part is effectively eliminated. One would rather demand a fatter, all-cash pay-cheque now. Unfortunately, no policies have been announced providing relief for the aspiring Indians in the Rs 10-30 lakh bracket while heavier taxation for Rs 50-100 lakh is also a serious “aspiration dampener!”

Telr founder and CEO Sirish Kumar said, “The budget looks well-rounded and in favour of digital economy, something we had anticipated following the demonetisation drive. There are policies to take internet to rural masses, including Bharat Net and ensure security of same via BHIM app and setting up CERT. Furthermore, limiting cash transactions to three lakh is going to work in favour of payment solution-providers, having the provision to handle payments of bigger ticket sizes. The increased emphasis on AadhaarPay, tax exemptions on Iris scanners, MicroATMs and POS machines, in addition to iris scanners, is further going to democratise digital economy in India. Taxes have been lowered for more than 67 per cent of MSME. This will make these businesses more viable.”

E-commerce Platforms: Craftsvilla & Snapdeal

Craftsvilla co-founder Manoj Gupta added, “There is nothing big bang in this Union Budget. There is very little for startups and ecommerce. Abolition of FIPB would hopefully make FDI easier. I was looking forward for the Government to take more proactive actions on areas like handloom and tourism that has huge potential for India. I would have also loved it if they announced developing handloom parks or heritage parks across the country with better facilities.”
Snapdeal Kunal Bahl co-founder & CEO Kunal Bahl said, “We commend the focus on growing the digital footprint in the country — enhancing digital infrastructure, capping cash transactions, reducing cash donations, using Adhaar Pay to enable more digital payments are significant measures. Initiatives make an impact when there is continued attention and the new announcements build on the demonetisation efforts. We also welcome the emphasis on skill development and technical education – this will enable India to successfully harness the demographic dividend. The attention to affordable housing, greater employment in rural areas are the right interventions to build a more equitable society.”

February 2, 2017
Budget ’17: Prasar Bharati grant-in-aid down, film sector’s aid up

NEW DELHI: The grant-in-aid for Prasar Bharati has come down marginally from the revised estimates from Rs 4500 million in 2016-17 to Rs 4300 million for 2017-18.

This includes a grants-in-aid to the pubcaster of Rs 3500 million and a separate grant-in-aid to it for the Kisan Channel of Rs 800 million which is higher than last year’s Rs 600 million.

In addition, there is support of Rs 29,967 million for 2017-18 against Rs 27,168.6 million in 2016-17 in the allocation of support to autonomous bodies. But, there is no investment in the head of public sector undertakings in Prasar Bharati, unlike last year.

An explanatory note says the grants-in-aid is being provided to cover the gap in resources of Prasar Bharati in meeting its revenue expenditure.

(Expenditure on salaries of Prasar Bharati has fallen on the shoulders of the government since all Prasar Bharati employees who were in employment as on 5 October 2007 have been given deemed deputation status.)

The total budget of the information and broadcasting ministry has been raised to Rs 44,090 million against Rs 40836.3 million.

There is a separate allocation of Rs 230 million for strengthening broadcasting activities which covers community radio (Rs 40 million), Electronic Media Centre (Rs 120 million), Mission Digitisation (Rs 50 million) and automation of broadcasting wing (Rs 20 million).

This is less than last year’s allocation in this head of Rs 308.3 million.

The allocation for the film sector has been raised to Rs 2070 million, and covers the National Museum of Cinema, Development communication and Dissemination of filmic content, Infrastructure Development Programme relating to the film sector, and Mission/Special projects which gets a massive increase to Rs 1100.1 million as compared to Rs 170.1 million last year. This allocation is for the Umbrella Programme Missions / Special Project includes the following Schemes:

National Film Heritage Mission (Main Secretariat), Anti-Piracy Initiatives and Setting up a National Centre of Excellence for Animation, Gaming and Special Effects (coming up in Mumbai).

There is an allocation of Rs 180 million for mass communication which includes upgradation of the Indian Institute of Mass Communication to international standards and opening regional centres of IIMC.

The allocation under ‘Secretariat – Social services’ has been raised Rs 795.2 million as compared to Rs 703.2 million, and art and culture to Rs 102.3 million. information and publicity gets Rs 4059.9 million for various programmes which include Directorate of Advertising and Visual Publicity; Press Information Bureau, Field Publicity, Song and Drama Division, Publications Division, Photo Division, Registrar of Newspapers in India and other media units.

After seven years in a row, the government has announced investment in the National Film Development Corporation to the tune of Rs 125.4 million.

There is a marginal increase in the lump sum provision for projects/schemes for development of North-eastern areas including Sikkim to Rs 842 million against Rs 800 million last year.

There is an allocation of Rs 30,732.6 million as support to autonomous bodies which apart from Prasar Bharati, also has allocations for the Film and Television Institute of India, Satyajit Ray FTII, Press Council of India, IIMC, and Children’s Film Society, India.

February 2, 2017
Budget ’17: Prasar Bharati grant-in-aid down, film sector’s aid up

NEW DELHI: The grant-in-aid for Prasar Bharati has come down marginally from the revised estimates from Rs 4500 million in 2016-17 to Rs 4300 million for 2017-18.

This includes a grants-in-aid to the pubcaster of Rs 3500 million and a separate grant-in-aid to it for the Kisan Channel of Rs 800 million which is higher than last year’s Rs 600 million.

In addition, there is support of Rs 29,967 million for 2017-18 against Rs 27,168.6 million in 2016-17 in the allocation of support to autonomous bodies. But, there is no investment in the head of public sector undertakings in Prasar Bharati, unlike last year.

An explanatory note says the grants-in-aid is being provided to cover the gap in resources of Prasar Bharati in meeting its revenue expenditure.

(Expenditure on salaries of Prasar Bharati has fallen on the shoulders of the government since all Prasar Bharati employees who were in employment as on 5 October 2007 have been given deemed deputation status.)

The total budget of the information and broadcasting ministry has been raised to Rs 44,090 million against Rs 40836.3 million.

There is a separate allocation of Rs 230 million for strengthening broadcasting activities which covers community radio (Rs 40 million), Electronic Media Centre (Rs 120 million), Mission Digitisation (Rs 50 million) and automation of broadcasting wing (Rs 20 million).

This is less than last year’s allocation in this head of Rs 308.3 million.

The allocation for the film sector has been raised to Rs 2070 million, and covers the National Museum of Cinema, Development communication and Dissemination of filmic content, Infrastructure Development Programme relating to the film sector, and Mission/Special projects which gets a massive increase to Rs 1100.1 million as compared to Rs 170.1 million last year. This allocation is for the Umbrella Programme Missions / Special Project includes the following Schemes:

National Film Heritage Mission (Main Secretariat), Anti-Piracy Initiatives and Setting up a National Centre of Excellence for Animation, Gaming and Special Effects (coming up in Mumbai).

There is an allocation of Rs 180 million for mass communication which includes upgradation of the Indian Institute of Mass Communication to international standards and opening regional centres of IIMC.

The allocation under ‘Secretariat – Social services’ has been raised Rs 795.2 million as compared to Rs 703.2 million, and art and culture to Rs 102.3 million. information and publicity gets Rs 4059.9 million for various programmes which include Directorate of Advertising and Visual Publicity; Press Information Bureau, Field Publicity, Song and Drama Division, Publications Division, Photo Division, Registrar of Newspapers in India and other media units.

After seven years in a row, the government has announced investment in the National Film Development Corporation to the tune of Rs 125.4 million.

There is a marginal increase in the lump sum provision for projects/schemes for development of North-eastern areas including Sikkim to Rs 842 million against Rs 800 million last year.

There is an allocation of Rs 30,732.6 million as support to autonomous bodies which apart from Prasar Bharati, also has allocations for the Film and Television Institute of India, Satyajit Ray FTII, Press Council of India, IIMC, and Children’s Film Society, India.

February 2, 2017
Media and entertainment industry hails Union Budget 2017

MUMBAI: On 1 February, the finance minister Arun Jaitley made significant announcements during the presentation of the Union Budget 2017. Although, there was no specific mention of measures for the media and entertainment industry, certain steps which have been taken to boost the economy have been appreciated by the industry, but it also disappointed some.

The budget 2017 mainly focused on boosting the infrastructure and lifting rural income besides bringing in reforms in the financial sector such as the abolition of the Foreign Investment Promotion Board (FIPB) so as to facilitate a new policy for foreign direct investment (FDI). The budget also focused on digitisation — allocating Rs 10, 000 crore to boost the rural fibre optics network, which came as a great news for many in the media and broadcast industry.

Indiantelevision.com reached out to several industry stalwarts to find out how they interpreted the Union Budget 2017. Here’s what they had to say:

Viacom18 group CEO and CII Media and Entertainment Committee chairman Sudhanshu Vats said, “Much had been speculated about the economic slowdown post demonetisation. With this budget, the government has taken important steps to boost the economy in a structured manner, building on the promise of transparent growth. Steps to liberalise the FDI regime further coupled with the abolishing of FIPB and tax reforms for MSMEs are bound to have impact in the foreseeable future. This budget has seen some positive solutions to tackle poverty in our country including one of the highest allocation of funds to MNREGA and rationalisation of rate for the lower personal tax slabs. I am particularly enthused by the strong reforms push for digitization and look forward to digital transactions increasing in the country. This also augurs well for digital consumption of video content. The move to cap political donations in cash at Rs 2000 and all-cash transactions at Rs 300,000 are also much-needed, bold steps that are in line with the government’s commitment to uprooting corruption. With Swaach Bharat being close to our hearts, the budget has built further on this theme in a welcome move. I’ve said this before and will say it again: as the M&E sector we have a lot to gain from buoyance in the economy at the aggregate level and I believe this Budget has delivered on that front.”

Zee Entertainment Enterprises Limited (ZEEL) MD and CEO Punit Goenka stated, “Budget 2017 speaks a lot about the government’s positive and committed approach towards creating a stronger and balanced economy. Being directionally right and focused on spending in growth-centric areas, it clearly reassures the fact that remonetisation is in.”

Times Network MD and CEO M K Anand said, “After the recent massive policy implementation of demonetisation, my expectation was of some radical reforms. I was a bit disappointed on that count. However, enhanced provision for MNREGA and allocations for rural, agriculture and allied sector and a clear push for the affordable housing sectors is the silver lining. Agriculture and real estate are the most important employment generating sectors in India. This should improve the rural situation which is still recovering from demonetisation. Hopefully, that will have a ripple effect on spending and the larger economy.”

Says ABP COO Avinash Pandey, “The Union Budget 2017 was disappointing as far as the expected incentive for the broadcast business is concerned. Service tax remains the same. Most importantly, there is no parity with the print sector. The ‘wow’ factor was missing (in the budget) as far as the business is concerned. Disposable income is going to increase, and hence the quantum of spending. Economy may revive after the implementation of the budget.”

Network 18 president revenue and Forbes India CEO Joy Chakraborthy is hopeful, saying, “We are seeing it as a positive budget. The budget is going to help consumption. Significant measures to improve electrification is eventually going to help the television industry. The general sentiment is that it is, overall a positive budget. Once people start spending money, consumption will be there and subsequently advertising too will follow.”

Says, BBC Worldwide – ‎BBC Worldwide India South East Asia and South Asia SVP and GM Myleeta Aga, “Overall a positive popular budget with personal income tax changes in line with the government’s declared intention to collect more taxes from the rich and reduce the tax burden on the middle income group.”

She added, “I was particularly encouraged to hear that the GST roll out will not be delayed. Operationally, for the production business, this will complicate working across states but this disruption should be temporary. Continued emphasis on the digital economy and increasing digital transactions will boost growth of e-commerce.”

SAB group CEO Manav Dhanda said, “Overall, there has been positives for the media and entertainment sector post the Union Budget. As digitization is the next big thing now, the end of March 2018 will see a great growth for digital video consumption across OTT. The youth can now have great opportunities laid for them by initiating the skill India mission that aims to start 100 India International centres. Also, since digitization is on a high, setting up high speed internet in 1.50 Lakh Gram Panchayat is a good move and will give a boost to internet penetration in India. There is no increase service tax by the government and is a positive outcome particularly for the M&E sector, a stable and positive fiscal situation is good for the economy which will also give an impetus to our advertising sales projections. Increased public spending through various schemes and focus on infrastructure investments should further help to accelerate economic growth. The economy seems to have being slowing down since demonetisation, impacting almost all sectors and one hopes this budget to act as a catalyst to propel the growth in the media sector as well.”

KPMG India partner tax Naveen Aggarwal said, “The Budget was based on broad themes of curbing black money, boosting individual spending, ensuring transparency and providing much needed impetus to agricultural and rural sector, infrastructure and digital economy.”

He added, “While the announcement to abolish FIPB in light of successful e-governance was surprising, further liberalisation in FDI policy will be keenly watched in context of M&E industry. Lastly, the FM provided much needed assurance on roll-out of GST as per schedule, confirming GST council finalising majority of its recommendations.”

He further added, “Similar to last two years, the Budget did not bring much respite or specific announcements benefiting M&E industry. While the expectation of overall reduction in corporate tax rate and abolition of MAT was given a miss, the proposal to reduce corporate tax rate for MSMEs to 25% (having turnover up to Rs 50 crore) and increasing the MAT credit entitlement (from 10 to 15 years) is a welcome move and will benefit medium scale service companies in M&E sector.”

February 2, 2017
Media and entertainment industry hails Union Budget 2017

MUMBAI: On 1 February, the finance minister Arun Jaitley made significant announcements during the presentation of the Union Budget 2017. Although, there was no specific mention of measures for the media and entertainment industry, certain steps which have been taken to boost the economy have been appreciated by the industry, but it also disappointed some.

The budget 2017 mainly focused on boosting the infrastructure and lifting rural income besides bringing in reforms in the financial sector such as the abolition of the Foreign Investment Promotion Board (FIPB) so as to facilitate a new policy for foreign direct investment (FDI). The budget also focused on digitisation — allocating Rs 10, 000 crore to boost the rural fibre optics network, which came as a great news for many in the media and broadcast industry.

Indiantelevision.com reached out to several industry stalwarts to find out how they interpreted the Union Budget 2017. Here’s what they had to say:

Viacom18 group CEO and CII Media and Entertainment Committee chairman Sudhanshu Vats said, “Much had been speculated about the economic slowdown post demonetisation. With this budget, the government has taken important steps to boost the economy in a structured manner, building on the promise of transparent growth. Steps to liberalise the FDI regime further coupled with the abolishing of FIPB and tax reforms for MSMEs are bound to have impact in the foreseeable future. This budget has seen some positive solutions to tackle poverty in our country including one of the highest allocation of funds to MNREGA and rationalisation of rate for the lower personal tax slabs. I am particularly enthused by the strong reforms push for digitization and look forward to digital transactions increasing in the country. This also augurs well for digital consumption of video content. The move to cap political donations in cash at Rs 2000 and all-cash transactions at Rs 300,000 are also much-needed, bold steps that are in line with the government’s commitment to uprooting corruption. With Swaach Bharat being close to our hearts, the budget has built further on this theme in a welcome move. I’ve said this before and will say it again: as the M&E sector we have a lot to gain from buoyance in the economy at the aggregate level and I believe this Budget has delivered on that front.”

Zee Entertainment Enterprises Limited (ZEEL) MD and CEO Punit Goenka stated, “Budget 2017 speaks a lot about the government’s positive and committed approach towards creating a stronger and balanced economy. Being directionally right and focused on spending in growth-centric areas, it clearly reassures the fact that remonetisation is in.”

Times Network MD and CEO M K Anand said, “After the recent massive policy implementation of demonetisation, my expectation was of some radical reforms. I was a bit disappointed on that count. However, enhanced provision for MNREGA and allocations for rural, agriculture and allied sector and a clear push for the affordable housing sectors is the silver lining. Agriculture and real estate are the most important employment generating sectors in India. This should improve the rural situation which is still recovering from demonetisation. Hopefully, that will have a ripple effect on spending and the larger economy.”

Says ABP COO Avinash Pandey, “The Union Budget 2017 was disappointing as far as the expected incentive for the broadcast business is concerned. Service tax remains the same. Most importantly, there is no parity with the print sector. The ‘wow’ factor was missing (in the budget) as far as the business is concerned. Disposable income is going to increase, and hence the quantum of spending. Economy may revive after the implementation of the budget.”

Network 18 president revenue and Forbes India CEO Joy Chakraborthy is hopeful, saying, “We are seeing it as a positive budget. The budget is going to help consumption. Significant measures to improve electrification is eventually going to help the television industry. The general sentiment is that it is, overall a positive budget. Once people start spending money, consumption will be there and subsequently advertising too will follow.”

Says, BBC Worldwide – ‎BBC Worldwide India South East Asia and South Asia SVP and GM Myleeta Aga, “Overall a positive popular budget with personal income tax changes in line with the government’s declared intention to collect more taxes from the rich and reduce the tax burden on the middle income group.”

She added, “I was particularly encouraged to hear that the GST roll out will not be delayed. Operationally, for the production business, this will complicate working across states but this disruption should be temporary. Continued emphasis on the digital economy and increasing digital transactions will boost growth of e-commerce.”

SAB group CEO Manav Dhanda said, “Overall, there has been positives for the media and entertainment sector post the Union Budget. As digitization is the next big thing now, the end of March 2018 will see a great growth for digital video consumption across OTT. The youth can now have great opportunities laid for them by initiating the skill India mission that aims to start 100 India International centres. Also, since digitization is on a high, setting up high speed internet in 1.50 Lakh Gram Panchayat is a good move and will give a boost to internet penetration in India. There is no increase service tax by the government and is a positive outcome particularly for the M&E sector, a stable and positive fiscal situation is good for the economy which will also give an impetus to our advertising sales projections. Increased public spending through various schemes and focus on infrastructure investments should further help to accelerate economic growth. The economy seems to have being slowing down since demonetisation, impacting almost all sectors and one hopes this budget to act as a catalyst to propel the growth in the media sector as well.”

KPMG India partner tax Naveen Aggarwal said, “The Budget was based on broad themes of curbing black money, boosting individual spending, ensuring transparency and providing much needed impetus to agricultural and rural sector, infrastructure and digital economy.”

He added, “While the announcement to abolish FIPB in light of successful e-governance was surprising, further liberalisation in FDI policy will be keenly watched in context of M&E industry. Lastly, the FM provided much needed assurance on roll-out of GST as per schedule, confirming GST council finalising majority of its recommendations.”

He further added, “Similar to last two years, the Budget did not bring much respite or specific announcements benefiting M&E industry. While the expectation of overall reduction in corporate tax rate and abolition of MAT was given a miss, the proposal to reduce corporate tax rate for MSMEs to 25% (having turnover up to Rs 50 crore) and increasing the MAT credit entitlement (from 10 to 15 years) is a welcome move and will benefit medium scale service companies in M&E sector.”

February 2, 2017
Budget 2017: After DeMo, govt. announces sops for digital infra & economy

NEW DELHI: Stating that the budget for 2017-18 was on the agenda to “Transform, Energise and Clean India” in a RAPID (Revenue, Accountability, Probity, Information and Digitisation) way, Finance Minister Arun Jaitley announced various concessions for pushing ahead digital economy, which indirectly may benefit some segments of the media and entertainment sector.

Under the BharatNet Project, 1, 55,000 km optic fibre cable had been laid in the country. The allocation for BharatNet Project had been increased to Rs 10,000 crore in 2017-18. By the end of 2017-18, high speed broadband connectivity on optical fibre will be available in more than 1, 50,000 gram panchayats (village administrative offices), with wi-fi hot spots and access to digital services at low tariffs. A DigiGaon or digital village initiative will be launched to provide tele-medicine, education and skills through digital technology, Finance Minister Arun Jaitley said.

The allocation for OFC-based network for defence services had also been increased from Rs 2710 crore in the last budget to Rs 3000 crore in 2017-18.

Coupled with push towards digital payments for services, including in the broadcast and cable segments, investments in the internet infrastructure and telecom equipments will likely have cascading benefits for the media sector too, especially those offering video streaming services on phones and other hand-held devises.

The finance minister said a shift to digital payments has huge benefits for the common man. The earlier initiative to promote financial inclusion and the JAM trinity were important precursors to government’s current push for digital transactions.

In a budget, which for the first time since independence was presented on 1 February instead of the last day of the month, Jaitley said an eco-system was being created to make India a global hub for electronics manufacturing. Over 250 investment proposals for electronics manufacturing had been received in the last two years, totalling an investment of Rs 1.26 lakh crore. A number of global leaders and mobile manufacturers have set up production facilities in India. “I have therefore exponentially increased the allocation for incentive schemes like M-SIPS and EDF to Rs 745 crore in 2017-18. This is an all-time high,” he added.

A major announcement by Jaitley was the abolition of the Foreign Investments Promotion Board (FIPB) and further liberalisation of FDI policy for which necessary announcements will be made in due course.

Jaitley said: “Our government has already undertaken substantive reforms in FDI policy in the last two years. More than 90 per cent of the total FDI inflows are now through the automatic route. The FIPB has successfully implemented e-filing and online processing of FDI applications. We have now reached a stage where FIPB can be phased out”.

He said the telecom sector was an important component of Indian infrastructure eco-system. He claimed the recent spectrum auctions have removed spectrum scarcity in the country and this will give a major fillip to mobile broadband and Digital India for the benefit of people living in rural and remote areas.

In a boost to domestic industry, a special additional customs duty of 2 per cent is being levied on Populated Printed Circuit Boards (PCBs) for use in the manufacture of mobile phones, subject to actual user condition.

Noting that India is on the cusp of a massive digital revolution, Jaitley said there was evidence of increased digital transactions. The BHIM (Bharat Interface for Money) app would unleash the power of mobile phones for digital payments and financial inclusion. A total 12.5 million people had adopted the BHIM app so far, Jaitley said, adding that the government will launch two new schemes to promote the usage of BHIM: referral bonus scheme for individuals and a cash back scheme for merchants.

Aadhar Pay, a merchant version of Aadhar Enabled Payment System, was being 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 25,000 million crore digital transactions for 2017-18 through UPI, USSD, Aadhar Pay, IMPS and debit cards. Banks have targeted to introduce additional one million new PoS (point of sales) terminals by March 2017 and they will be encouraged to introduce two million Aadhar-based PoS by September 2017, the finance minister said.

Jaitley said the Government will consider and work with various stakeholders for early implementation of the interim recommendations of the Committee of Chief Ministers on digital transactions. The Committee on Digital Payments, constituted by Department of Economic Affairs, had recommended structural reforms in the payment eco system, including amendments to the Payment and Settlement Systems Act 2007.

In a boost for digitisation, the government has removed service tax on e-tickets booked through IRCTC (Indian Railways’ website).

According to a PTI report, after a flat day time trading Sensex zoomed 485.68 pts to close at 28,141.64.

February 1, 2017
Budget 2017: After DeMo, govt. announces sops for digital infra & economy

NEW DELHI: Stating that the budget for 2017-18 was on the agenda to “Transform, Energise and Clean India” in a RAPID (Revenue, Accountability, Probity, Information and Digitisation) way, Finance Minister Arun Jaitley announced various concessions for pushing ahead digital economy, which indirectly may benefit some segments of the media and entertainment sector.

Under the BharatNet Project, 1, 55,000 km optic fibre cable had been laid in the country. The allocation for BharatNet Project had been increased to Rs 10,000 crore in 2017-18. By the end of 2017-18, high speed broadband connectivity on optical fibre will be available in more than 1, 50,000 gram panchayats (village administrative offices), with wi-fi hot spots and access to digital services at low tariffs. A DigiGaon or digital village initiative will be launched to provide tele-medicine, education and skills through digital technology, Finance Minister Arun Jaitley said.

The allocation for OFC-based network for defence services had also been increased from Rs 2710 crore in the last budget to Rs 3000 crore in 2017-18.

Coupled with push towards digital payments for services, including in the broadcast and cable segments, investments in the internet infrastructure and telecom equipments will likely have cascading benefits for the media sector too, especially those offering video streaming services on phones and other hand-held devises.

The finance minister said a shift to digital payments has huge benefits for the common man. The earlier initiative to promote financial inclusion and the JAM trinity were important precursors to government’s current push for digital transactions.

In a budget, which for the first time since independence was presented on 1 February instead of the last day of the month, Jaitley said an eco-system was being created to make India a global hub for electronics manufacturing. Over 250 investment proposals for electronics manufacturing had been received in the last two years, totalling an investment of Rs 1.26 lakh crore. A number of global leaders and mobile manufacturers have set up production facilities in India. “I have therefore exponentially increased the allocation for incentive schemes like M-SIPS and EDF to Rs 745 crore in 2017-18. This is an all-time high,” he added.

A major announcement by Jaitley was the abolition of the Foreign Investments Promotion Board (FIPB) and further liberalisation of FDI policy for which necessary announcements will be made in due course.

Jaitley said: “Our government has already undertaken substantive reforms in FDI policy in the last two years. More than 90 per cent of the total FDI inflows are now through the automatic route. The FIPB has successfully implemented e-filing and online processing of FDI applications. We have now reached a stage where FIPB can be phased out”.

He said the telecom sector was an important component of Indian infrastructure eco-system. He claimed the recent spectrum auctions have removed spectrum scarcity in the country and this will give a major fillip to mobile broadband and Digital India for the benefit of people living in rural and remote areas.

In a boost to domestic industry, a special additional customs duty of 2 per cent is being levied on Populated Printed Circuit Boards (PCBs) for use in the manufacture of mobile phones, subject to actual user condition.

Noting that India is on the cusp of a massive digital revolution, Jaitley said there was evidence of increased digital transactions. The BHIM (Bharat Interface for Money) app would unleash the power of mobile phones for digital payments and financial inclusion. A total 12.5 million people had adopted the BHIM app so far, Jaitley said, adding that the government will launch two new schemes to promote the usage of BHIM: referral bonus scheme for individuals and a cash back scheme for merchants.

Aadhar Pay, a merchant version of Aadhar Enabled Payment System, was being 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 25,000 million crore digital transactions for 2017-18 through UPI, USSD, Aadhar Pay, IMPS and debit cards. Banks have targeted to introduce additional one million new PoS (point of sales) terminals by March 2017 and they will be encouraged to introduce two million Aadhar-based PoS by September 2017, the finance minister said.

Jaitley said the Government will consider and work with various stakeholders for early implementation of the interim recommendations of the Committee of Chief Ministers on digital transactions. The Committee on Digital Payments, constituted by Department of Economic Affairs, had recommended structural reforms in the payment eco system, including amendments to the Payment and Settlement Systems Act 2007.

In a boost for digitisation, the government has removed service tax on e-tickets booked through IRCTC (Indian Railways’ website).

According to a PTI report, after a flat day time trading Sensex zoomed 485.68 pts to close at 28,141.64.

February 1, 2017
Budget 2017: From highway to e-way media sector searches for sops

MUMBAI: The Indian government today unveiled a roadmap for financial year 2017-18 that covers areas from “highways to e-ways” (PM Modi’s words while describing the Union Budget 2017) aimed at “strengthening the hands of the poor”, while looking at further easing doing business by abolishing Foreign Investment Promotion Board and hinting at a new FDI policy. However, for India’s media and entertainment sector, especially the broadcast and cable sector looking to reach the $ 100 million turnover mark, there wasn’t much to cheer about — unless an angel is hiding in the fine prints that are still being deciphered.

Finance minister Arun Jaitley, while announcing the Budget, has brought in macro-level major financial reforms by slashing tax rates for middle level income groups and opening the FDI floodgates in favour of a rural economy.

Jaitley’s budget focused on boosting infrastructure and lifting up rural incomes besides bringing in reforms in the financial sector such as the abolition of the FIPB to enable a new policy for FDI. The Indian Railways Catering and Tourism Corporation (IRCTC), one of the world’s biggest e-commerce companies, will be now be listed, Jaitley said, aside from sending out an indirect warning to economic offenders such as Lalit Modi and Vijay Mallya that for for absconders new legislation would be drafted soon.

But a big thumbs up to the government for allocating Rs. 10,000 crore (Rs 100,000 million) to boost rural fibre optics network to give further leg up to all round digitisation.

While the fine prints are still being read, some highlights are as follows:

# The FIPB will be abolished. Further liberalisation in the FDI policy would be done in the next few days. (Star Den, etc to benefit)

# SANKALP – Rs 4000 crore allotted for market-oriented training. (At least 4 million youth will be provided market-relevant training under Sankalp programme)

# Cashback scheme – Petrol pumps card payments, launch two more schemes for use of BHIM app

# In yet another boost for digitisation, the government has removed service tax on e-tickets .

#IRCTC to be listed.

# The government proposes to create a payment regulatory board at RBI. (The proposal assumes significance as there is currently no regulator for FinTech companies such as Paytm in India.)

# Small and Medium enterprises (MSME) to be encouraged. Income tax reduced to 25% from 30% if turnover is up to Rs 50 crore or Rs 500 million.

# Startups to pay tax on profits for three out of seven years, increased from three out of five years.

# Under Bharat Net, optic fibre cable has been laid out In 1,55,000 km. (Recent spectrum auctions have removed spectrum scarcity.) Bharat Net allocation at Rs 10,000 crore.

February 1, 2017
Budget 2017: From highway to e-way media sector searches for sops

MUMBAI: The Indian government today unveiled a roadmap for financial year 2017-18 that covers areas from “highways to e-ways” (PM Modi’s words while describing the Union Budget 2017) aimed at “strengthening the hands of the poor”, while looking at further easing doing business by abolishing Foreign Investment Promotion Board and hinting at a new FDI policy. However, for India’s media and entertainment sector, especially the broadcast and cable sector looking to reach the $ 100 million turnover mark, there wasn’t much to cheer about — unless an angel is hiding in the fine prints that are still being deciphered.

Finance minister Arun Jaitley, while announcing the Budget, has brought in macro-level major financial reforms by slashing tax rates for middle level income groups and opening the FDI floodgates in favour of a rural economy.

Jaitley’s budget focused on boosting infrastructure and lifting up rural incomes besides bringing in reforms in the financial sector such as the abolition of the FIPB to enable a new policy for FDI. The Indian Railways Catering and Tourism Corporation (IRCTC), one of the world’s biggest e-commerce companies, will be now be listed, Jaitley said, aside from sending out an indirect warning to economic offenders such as Lalit Modi and Vijay Mallya that for for absconders new legislation would be drafted soon.

But a big thumbs up to the government for allocating Rs. 10,000 crore (Rs 100,000 million) to boost rural fibre optics network to give further leg up to all round digitisation.

While the fine prints are still being read, some highlights are as follows:

# The FIPB will be abolished. Further liberalisation in the FDI policy would be done in the next few days. (Star Den, etc to benefit)

# SANKALP – Rs 4000 crore allotted for market-oriented training. (At least 4 million youth will be provided market-relevant training under Sankalp programme)

# Cashback scheme – Petrol pumps card payments, launch two more schemes for use of BHIM app

# In yet another boost for digitisation, the government has removed service tax on e-tickets .

#IRCTC to be listed.

# The government proposes to create a payment regulatory board at RBI. (The proposal assumes significance as there is currently no regulator for FinTech companies such as Paytm in India.)

# Small and Medium enterprises (MSME) to be encouraged. Income tax reduced to 25% from 30% if turnover is up to Rs 50 crore or Rs 500 million.

# Startups to pay tax on profits for three out of seven years, increased from three out of five years.

# Under Bharat Net, optic fibre cable has been laid out In 1,55,000 km. (Recent spectrum auctions have removed spectrum scarcity.) Bharat Net allocation at Rs 10,000 crore.

February 1, 2017
Budget ’17: Encourage digital economy to make tax system globally competitive

MUMBAI: Various industry sectors are of course expecting the budget to ease stress in the business environment with tax rebates, restructuring of slabs or incentives. The advertising and communication industry is seeking some incentive announcements to further popularise the digital initiatives of the government. In the backdrop of demonetisation, every addressable transaction may be charged which may ideally move in the direction of becoming a zero-tax nation.

Pulp Strategy Communications Founder & MD Ambika Sharma says, “The upcoming budget announcement I hope will focus on providing incentives such as better tax slabs to ‘Make in India’ companies in the technology space. A relaxation in the corporate tax rate will give a great boost to the startups in the tech sector in India, and will encourage tech companies to contribute more actively to the vision of ‘Digital India’.”

She recommends that “Provisions must also be made for carry forwarding losses to be set off against any future income.”

Sharma feels, “The growth in smartphone penetration and better internet connectivity means that more consumers are now leveraging the online channels of media consumption. However, players in the segment currently have to deal with different taxation slabs, leading to multi-layered problems such as effective tax rates, dual tax levies, and multiplicity of indirect taxes. This calls for a standardisation of tax and implementation on online media in the latest budget. Implementation of the tax should be standardized and made simpler with all players following a standard structure with no ambiguity.”

Vertoz Media CEO and founder Ashish Shah says, “There is hope that there will be some incentive announcements to further popularise the digital initiatives of the government. Being a pure AdTech firm, we are very optimistic on the government’s vision of ‘Digital India’. We expect to see a growth oriented budget.”

“The government has been encouraging entrepreneurship among the younger generation with its flagship initiative – ‘Startup India’ and keep up the momentum this time as well. More entrepreneurs in the ecosystem will drive sustainable economic growth and generate more job opportunities,” Shah added.

Dentsu Aegis Network chairman & CEO – South Asia said, “A Union Budget that is growth oriented and puts more money in the pocket of the common man will benefit the advertising industry. Research has shown that, as a rule of thumb, every percentage point added to the GDP growth adds 1.5 – 2 per cent points to the advertising Industry growth. So, I hope that there is a growth oriented budget, which in turn spurs economic growth all around in India, particularly in the rural areas.”

He is forthcoming on the fact that “the advertising industry doesn’t really mind paying legitimate taxes. It is actually the on-ground implementation and the complexities of the taxation system that causes huge amounts of productive time to be wasted in unproductive red-tape. In that context, any simplification of the taxation processes, both in the direct and in the indirect tax areas will be welcome. Even GST, which was supposed to simplify indirect taxation, is likely to inadvertently make it much more tedious for the services sector. The Government needs to address this urgently. Service tax on advertising is already very high at 15 per cent, including surcharges. I hope, particularly given the slowdown caused due to demonetisation, the finance minister will consider not taking it up any further and reducing it if possible.”

Chrome Data Analytics & Media MD Pankaj Krishna says, “Post-demonetisation, the government would be looking at increasing demand, hence we can expect people-friendly measures being introduced in this budget. There will also be a focus on more spends on infra, utilizing the gains from demonetisation. The prime minister’s laudable schemes, including smart cities and digital India should stand to gain more fund allocation. Rural connectivity too will be in focus, given the govt.’s push towards cashless transactions.”

Krishna feels, “This is an ideal time to see a cut in corporate tax, given the unprecedented collections for banks, to the tune of Rs 14 lakh crore. Personal taxes too should see a cut and a more simplified structure. The exchequer would generate it from charging a percentage per transaction, since these will be addressable transactions. Ideally, this will be a move in the direction of becoming a zero-tax nation.”

moneycontrol editor Santosh Nairbelieves, “Due to the buoyant tax collections — both direct and indirect, the numbers for the current fiscal are likely to be healthy. Most economists expect the fiscal deficit target of 3.5 per cent to be maintained.”

He feels, “The big challenge for the FM is going forward is to forecast revenues and spending without a clear handle on the impact of demonetisation.”

“To help create more jobs without adding to its own wage bill,” he opines, “the government is likely to announce incentives for start-ups by way of friendly tax structures and fewer approvals to set up a business.”

Viacom18 group CEO & CII media and entertainment committee chairman Sudhanshu Vats is expectant of a high-impact budget, as he says, “This budget will be a ‘transformational’ budget. The government has already showcased its commitment to alter the status quo by changing the classification of expenditure, subsuming the rail budget and advancing the date of the announcement.”

He says, “I have always maintained that as an industry, we have a lot to gain from an economy that is buoyant in the aggregate sense. This year’s budget will enable just that – a revitalized economy that’s raring to go. Demonetisation is sure to expand the tax base in the medium term. I am certain that the government will use this added fire-power in a prudent manner. Hopefully, we’ll get to hear policy measures that encourage the digital economy, make India’s tax system globally competitive and put more money in the hands of Indians. As the saying goes, ‘the best is yet to come’.”

SABGROUP CEO Manav Dhanda says, “From a media industry perspective, 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 be sector-positive. There is a landmark attempt in the budget to simplify the tax administration, which should herald a friendlier tax regime.”

“Not increasing the service tax,” he said, “is a positive, particularly for the advertising and media sector.” “The general expectation will be 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,” he feels.

There will an expectation based on what the finance minister said in the past, that the corporate tax rate would come down, Dhanda said.

In balance, there seems an expectation of a mixed bag budget with a positive bias.

“Digitisation, in my opinion,” he said, “is the most important factor for the broadcast sector — change in excise duty changes proposed for set-top-boxes might help in the last mile infrastructure of Digital Addressable System (DAS).”

“The proposal for a more conducive excise duty regime for STBs and other ‘entertainment-access devices’ would be welcome,” he said.

Jack in the Box Worldwide president Kaizad Pardiwalla says,”I hope this budget is a growth-oriented budget, one that incentivises consumption. If GST comes in that will also aid India Inc. and will hopefully see an upswing in media spends. Digitalisation is and should remain a priority for the government as it is leading to an opening up of the economy and driving profitable growth.”

Contiloe COO Anup Vijai says, “I think there will a reduction in the overall tax rate. And also, GST was supposed to be implemented come 1 April, but now they are talking about 1 July. So we are expecting a road map around that. Right now, the GST slab rates have come up.”

“Going forward,” he said, “we are expecting the rates of movie tickets to go down say by 15 to 20 per cent in the state of Maharashtra where we have a very high entertainment tax. Moreover, high rates of entertainment tax and lack of uniformity in tax rates across different states, is adding on. A uniform taxation across product categories will benefit the entertainment sector on the whole,” he added.

February 1, 2017