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Industry holds bright outlook for budget 2018

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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:

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"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

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"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

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“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

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“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

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“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

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“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

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