The interim budget or Vote of Account tabled by Union finance minister Nirmala Sitharaman in the Parliament on Thursday has energized the media and advertising sector. The government has allocated Rs 4,342.55 crore to the Ministry of Information and Broadcasting for 2024-25. This is slightly lower than Rs 4,449.79 in the previous fiscal. Of the allocation, a huge sum, Rs 2,959.94 crore, has been allocated to broadcasting, while Rs 1,088.16 crore has been kept for Information and Publicity.
TheM&A industryhas applauded the Budget calling it “a boost for the consumption economy and startup ecosystem”. They hoped that the interim Budget would set the stage for the growth of the sector that was reeling under pressure in 2023 due to inflation, recession and multiple war zones globally.
Other highlights of the Budget include an 11.1% increase in the capital expenditure outlay for infrastructure development and employment generation to Rs.11,11,111 crore, Rs 1 lakh crore corpus to encourage innovation in sunrise sectors, extended tax benefits to start-ups and investments made by sovereign wealth funds, long-term interest free loans to States for development, reduced custom duty on certain goods like mobile phone components.
Besides, the government has withdrawn outstanding direct tax demands up to Rs 25,000 pertaining to the period up to FY 2009-10 and up to Rs 10000 for financial years 2010-11 to 2014-15 withdrawn. The move will benefit one crore tax payers. Besides, over one crore households will obtain 300 units free electricity every month through rooftop solarization which will help them save Rs.15,000 to Rs.18,000 annually.
While there is no change in the direct or indirect taxes, experts say the budget has the potential to inspire consumers' confidence and boost their disposable income, especially among the middle and lower income groups. This in turn will boost the economy and lift the media and advertising spends, industry experts tell e4m.
Golden era for M&A sector: Punit Goenka
Punit Goenka, MD & CEO, ZEE Entertainment Enterprises, said, "The government’s efforts to boost India’s economy through structured policy reforms will accelerate the development of our Nation over the next few years. The steps taken by the Hon'ble Finance Minister to empower the youth by fuelling the entrepreneurial spirit and fostering innovation in technology through initiatives like the 1 lakh crore research corpus, creates a golden era for sunrise sectors such as media & entertainment. The combination of youth and technology certainly holds immense potential and can lead to exciting new opportunities for content distribution and monetization, boosting the growth of the M&E sector at large.”
This interim budget is for consumption economy and hence will enhance consumption at the hands of consumers especially in rural areas since the infrastructure development will happen in states to improve road and rail infrastructure, that will create jobs and also better distribution networks for industries, which in turn should help them increase their sales and advertising spend, says an TV industry executive.
Mobile phone category gets uplift
A drop in custom duty for mobile phones components will help bring more consignments to sell, hence may improve advertising in that sector. Also, startups may now start to look at advertising to increase top lines since their tax benefits have been extended. All these things should help a growing outlook for advertising in all sectors of the media industry, industry experts say.
Reduction in Corporate Tax & focus on modern infra to stimulate ad growth
Shradha Agrawal, Founder and CEO- Grapes, opines, “The government’s initiative to provide adequate finances and advanced technologies to micro, small, and medium enterprises (MSMEs) will benefit the overall economy. Also, there's a notable reduction in the corporate tax rate, down from the previous 30% to 22%. The budget also allocates considerable attention to the development of modern infrastructure in all its forms—digital, social, and physical—opening up new opportunities for the M&E sector, particularly at the intersection of AI and market technology.
According to Shrenik Gandhi, CEO, White Rivers Media, the interim Budget 2024 is an absolute mature non-appeasement budget. The relief in corporate tax will drive immense consumption benefiting MSMEs and startups, laying the groundwork for sustained economic growth, with advertising reaping the compounding benefits. This strategic vision extends to the burgeoning AVGC sector, nurturing its global potential. Initiatives like UPI, DigiLocker, and a robust digital tech stack have opened unprecedented global avenues for exporting India’s tech prowess.
More FDI flow means more opportunities in digital marketing: Prashant Puri
According to the data shared by the Finance Minister, the Foreign Direct Investment (FDI) inflow from 2014 to 2023 was USD 596 billion, signifying global confidence in the Indian economy. The trends suggest a positive trajectory in the coming years, which is expected to create more opportunities for industries, including the digital marketing sector, as well as for job seekers, says Prashant Puri, Co-Founder & CEO, AdLift.
Startups need more targeted initiatives: Gautam Madhavan
As the economy strides towards sustained growth, the government's prudent approach in maintaining existing tax rates is understandable. However, we look forward to more targeted initiatives for startups in the upcoming full Budget in July. The overall budgetary estimates, with a focus on interest-free loans, reflect a balanced approach towards economic growth. We anticipate further details in the detailed roadmap for 'Viksit Bharat' promised in the full Budget, paving the way for a more prosperous and inclusive India, says Gautam Madhavan, CEO and Founder, Mad Influence.
Crypto Industry awaits reforms
Crypto is experiencing a resurgence this year. The markets are showing positive growth, retail activity is increasing, and there is clear regulatory progress happening worldwide. However, due to it being an election year in India, the Interim Budget had limitations that prevented the necessary tax adjustments for the sector.
Ashish Singhal, Co-Founder and Group CEO, Peepal Co, said, “The Government of India now has the chance to introduce comprehensive crypto regulations and improved tax policies in the upcoming full Budget, with the full support of the electorate. We continue to urge: i) Allow offsetting and carrying forward losses ii) Reducing the TDS on VDAs, from 1% to 0.01% and iii) and treating income from VDAs on par with other capital assets.”
