More money, more ads: M&E industry hails tax rebate in Union Budget 2025

The Union Budget 2025 has brought a wave of optimism for the media and entertainment sector, with industry leaders lauding its middle-class-friendly tax reforms, startup support, and significant investment in artificial intelligence. These measures are expected to have a ripple effect across various industries, influencing consumer behaviour and business strategies alike.

With the government’s move to ease the tax burden on salaried individuals, industry experts believe it is expected to unlock greater spending power, fuelling demand across key sectors such as automobiles, real estate, consumer goods, and travel. This increased consumer spending is likely to translate into higher investments in advertising and marketing, further boosting the media sector.

Pradeep Dwivedi, Group CEO of Eros Media World, highlighted the budget’s consumer-driven approach, calling it a "positive" step for the industry, with AI Centers of Excellence and funding initiatives set to boost creative and IP-based businesses. He emphasized that these initiatives would not only foster innovation but also provide new opportunities for content creators and tech-driven enterprises.

“An overall positive budget with middle-class beneficial schemes and rationalized income-tax structures that encourage the consumers of media business at large. Sector-agnostic schemes for startup-up funding and an outlay of ?500 crore for setting up AI Centers of Excellence are very promising initiatives that will help the creative and IP-based industries,” Dwivedi said.

Echoing similar sentiments, Ashish Sehgal, Chief Growth Officer at Zee Entertainment Enterprises Ltd (ZEEL), pointed out that apart from the tax rebate up to Rs 12 lakh of income, which will boost consumption sectors like FMCG, auto, consumer durables, and real estate, “there is also good news for MSMEs, as the Union Budget doubled credit guarantee cover for them to ?10 crore. This will help them invest more. Hence, all the above sectors will help increase AdEx by spending more on advertisements to further boost consumption through mind matrix.”

Adding another perspective, Chetan Asher, Founder & CEO of Tonic Worldwide, highlighted how the budget’s focus on AI in education and universal broadband access in schools would shape a new generation of digitally native consumers and creators.

He noted, “When you pair this with the formalization of the gig economy through social security schemes, you're looking at a complete digital ecosystem transformation. This budget isn't just about digital infrastructure—it's about creating a more inclusive, secure, and skilled digital India that will fundamentally reshape how brands connect with their audiences.”

Vishesh Sharma, Former CMO of Bajaj Broking, reinforced this sentiment by stating that the budget spells good news for both brands and investors. “Extra disposable income is going to increase the purchasing power of consumers,” he said, indicating that this will, in turn, drive demand across multiple industries, including advertising.

The impact of these measures is also expected to extend to cinema advertising.

Yogesh Kapil, National Sales Head at Qube Cinema Network, emphasized that the Union Budget 2025 arrives at a pivotal moment in India’s economic recovery and growth trajectory. “The government has focused on fostering economic resilience through strategic investments in infrastructure, technology, and digital innovation. These measures are expected to stimulate consumption, boost disposable income, and further empower the consumer sector, including the rapidly growing Gen-Z demographic,” he stated.

Kapil further noted that for brands, the increased focus on infrastructure development, digitization, and consumer protection should result in more business opportunities, driving up advertising spend in both traditional and new-age platforms. “Allocation towards enhancing digital ecosystems is particularly significant, as brands look to balance their media spends across digital and out-of-home platforms. Cinema advertising, which has long been a dynamic medium for reaching mass audiences, stands to benefit significantly from these shifts,” he added.

This optimism was also shared by Junaid Shaikh, Managing Director of RoshanSpace Brandcom, who pointed out that the budget lays a strong foundation for the continued growth of the Indian advertising and OOH industry.

He highlighted key allocations such as the ?1 lakh crore Urban Challenge Fund, investments in smart city infrastructure, and the expansion of public transport networks, all of which will create new avenues for impactful OOH and DOOH advertising. “With increased disposable income due to revised tax slabs, consumer spending is expected to rise, leading to higher advertising investments across sectors,” he added.

However, not all aspects of the budget were met with unanimous praise.

Bhavesh Talreja, Founder and CEO of Globale Media, acknowledged the promising outlook for marketing and advertising but pointed out a critical gap.

“The government’s emphasis on boosting disposable income through revised tax structures is expected to drive consumer spending, which, in turn, could lead to increased marketing and advertising investments across industries. But, on the other hand, the lack of a reduction in the 18% GST on advertising services remains a missed opportunity, particularly for SMEs and digital-first brands that operate with constrained marketing budgets,” he noted.

Talreja emphasized that while the budget lays a strong foundation for technological progress and economic expansion, a more inclusive approach toward tax relief and financial incentives for advertising services could have significantly amplified industry growth. “A revision in this tax structure could have significantly alleviated financial pressures and encouraged broader ad spending,” he added.

Siddharth Devnani, Co-Founder and Director of SoCheers, weighed in on the broader digital transformation initiatives introduced in the budget. He pointed out that the ?20,000 crore R&D spending, DeepTech Fund of Funds, and investment in AI excellence centers signal India's commitment to technological advancement. “The establishment of Atal Tinkering Labs and broadband connectivity in government schools will create a future-ready digital workforce,” he said.

Devnani further explained that, combined with the significant tax relief that increases disposable income across the middle class, these initiatives are likely to accelerate digital adoption and consumer spending.

“For the advertising and marketing industry, this presents a unique opportunity—we're looking at a more digitally connected consumer base with enhanced purchasing power,” he said.

Beyond urban markets, the budget also aims to transform rural economic growth. Rajesh Radhakrishnan, Co-Founder & Chief Marketing Officer at Vritti Mindwave Media, emphasized its strong emphasis on agriculture and financial empowerment.

“Initiatives like the PM Dhan Dhyan Krishi Yojana, the six-year pulses mission, and the expanded Kisan Credit Card network will equip farmers with the necessary resources to enhance productivity and profitability. The five-year programme to boost cotton yields will not only strengthen rural textile clusters but also generate employment and entrepreneurial opportunities,” he noted.

According to Radhakrishnan, the revised tax structure will further boost financial flexibility for individuals.

“As incomes and wages rise, discretionary spending is likely to increase, further stimulating markets including urban, rurban, and rural. This additional income can also be channeled into essential areas such as healthcare and education for children, reinforcing long-term economic stability and growth,” he added.

Summarizing the fiscal measures, Finance Minister Nirmala Sitharaman proposed a revised tax rate structure: 0 to ?4 lakh—nil, ?4 to ?8 lakh—5%, ?8 to ?12 lakh—10%, ?12 to ?16 lakh—15%, ?16 to ?20 lakh—20%, ?20 to ?24 lakh—25%, and above ?24 lakh—30%.

By freeing an estimated ?85,000–1.19 lakh crore in disposable income across 30% of urban households, the policy directly amplifies purchasing power in discretionary sectors like consumer electronics, premium FMCG products, and lifestyle services.