Industry vents ire on 'nothing budget'

NEW DELHI: In the initial reactions to the 2007-08 budget proposals by Union Finance Minister, the media industry seemed distraught that none of the reliefs it has sought have been considered.

"There is nothing we had hoped for," a source in the Indian Broadcasting Foundation told The source pointed out that the Sensex crash pointed to the sentiments of the corporate sector and the media industry could not feel otherwise.

Both the major commerce and industry chambers, Federation of Indian Chambers of Commerce and Industry, as well as the Confederation of Indian Industry have, meanwhile, said they were disappointed with the budget.

There were, however, indications, that the industry, especially MSOs would perhaps try and activate the government to meet with their demands in the ensuing period of debate on the budget proposals

One major news channels told this correspondent that the major thing they had proposed was reduction of customs duty on STBs and components for producing them indigenously, but hopes had been dashed.

Said India TV CEO Chinatamani Rao, "What could one react to? The IBF had on behalf of the broadcasting industry given several suggestions and nothing has been done on those issues. There is nothing in the budget for the entartainment or broadcasting industry. At best, you can say it is a neutral budget."

However, Big 92.7 FM COO Tarun Katial, struck a less strident note when he said, "Reduction in the customs duty works in the favor of business houses. The service tax however needs to reduce… especially since the radio industry is at its infancy and has great employment and media opportunities in the semi-urban and rural markets.

"Local retail advertisers are at the bottom of the pyramid and they should not be subject to service tax, especially if they have to be enabled to compete with other established / larger players. The benefits that the budget brings to the agricultural sector is very good and with our network spreading across the country and reaching out to 50,000 villages, it is sure to be good for business.

"Extending FBT on ESOPs requires some analysis and the additional 1 per cent cess on all taxes is sure to burn a hole in some pockets."

Radio Mirchi CEO Prashant Pandey said, "There has been nothing specific for the radio industry in this budget. So while it is a growth budget and that is good news for advertising, that is the only thing which brings cheer. I dont think radio was looking at anything specific either. We had asked for a waiver of customs duty in our pre budget memorandum, so that was expected."

Arvind Mohan, senior executive vice president of WWIL told "This is a dismal budget. There is nothing in it for us."

He opined that at best, the marginal reduction of tax burden on import of digital equipment could be seen as a s sort of a silver line.

There has been no change in the customs duty for import of STBs, and the service tax, which had been sought to be done away with in this budget, has been slightly augmented, from 12.24 to 12.36 per cent, which is detrimental to the growth of the industry, Mohan felt.

Stressing that he felt that the dividends distribution tax and the tax on share options for employees would also dampen industry spirit as a whole, Mohan said, "We shall take it up with Trai and also with the Indian Media Group, and lobby with the finance ministry and we hope the government will heed our demands.

Roop Sharma, president, Indian Cable Operator‘s Federation, said: "Chidambaram wants complete digitalisation of cable TV before the 2010 Commonwealth Games, but what has he done for that? Nothing. I think they want the small industries like cable operators to die out, because they have given no tax holiday for us at all."

Senior Trai officials said that they had sent their proposals to the finance ministry some 25 days ago, and "by then the budget procedure might have got a long way through," indicating therefore, that they were not happy with what has been proposed for the sector.

The official said that due to certain reasons, he had not been able to look at the exact budget proposals, and would be ready to comment later only.

Most observers, however, felt that there was nothing in this budget for the media and entertainment industry, but sought more time for giving more considered opinion.

Trai had strongly proposed that customs duty on import of STBs and their components be reduced to Zero, and service tax be waived. It had called for rationalisation of tax structure to provide for a level playing field for the newspaper and electronic media, but that has not been reflected in the proposals by the finance minister.

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