MxMIndia

Category: SPECIALS

  • There are three levels at which the government can help fast track the M&E industry, writes CVL Srinivas, CEO GroupM South Asia

    BudgetSpeak #1: CVL Srinivas: Budget 2014 – An opportunity to reboot M&E

    By CVL Srinivas

     

    If Information Technology was the hero of the 1990s and early 2000s, the Media and Entertainment (M&E) Industry has the potential of emerging as the next big growth driver of the Indian economy. We have all the ingredients of making it really big – a Rs 1000 billion+ industry, a 1.2 billon strong entertainment hungry market in India and a growing number abroad, the most active and diverse film industry, over 600 TV channels, a print industry that is still very large and growing unlike in most other countries, a radio industry that has managed to do well despite all the constraints, a growing digital industry that is seeing a lot of world class innovation and IP creation, a talented advertising industry and a very skilled base of data and analytics resources that can play an important role in the data rich digital era.

     

    There are three levels at which the government can help fast track the M&E industry, some of which are related to the budget and the rest more linked to policy.

    1. Make M&E businesses more viable: There are a host of areas that need to be looked into urgently to help the industry get super charged. From a reduction in custom duties on STBs, digital infrastructure and a rationalization of taxes for DTH players, the government can create a more viable environment for the broadcast sector. With Indian diaspora spread across the world, Indian TV channels must be encouraged to expand their footprint and create global brands. The print sector has been hit badly by the rising costs of newsprint and the implementation of wage board recommendations. Given that we are one of the few countries where print continues to grow, the industry needs support. Faster implementation of radio expansion through Phase 3, stimulus to help expand cinema reach in smaller towns and rationalization of entertainment tax on cinemas are some of the other measures that can be taken.

     

    2. Ensure policies are sensible and actionable and don’t cause disruption in the short-term: We had a fair bit of disruption in the past 12-18 months due to policy announcements that were either ill-timed or not followed through with action. For all policy matters, the government would do well to consult all stakeholders and not play to any one section. We need special emphasis on new media, convergence and digital as many areas either lack policy or fall into grey zones.

     


    3. Make India a global M&E hub:     In this age of digital disruption, India has a great opportunity of becoming a global M&E hub. The government must co-create a vision with industry stakeholders that will give India its rightful place in this sector on the global map. The starting point is to ensure we invest in talent especially developing a skilled resource base in new media. We are seeing a lot of homegrown technology-led innovation in the broadcast sector as well as in mobile, digital and data. Special zones that harness the entrepreneurial spirit in M&E areas need to be created. We can develop a world class cinema ecosystem and help revive cinema in many countries. In addition, tourism infrastructure linked to our film and entertainment industry can be created.

     

    CVL Srinivas is CEO GroupM South Asia

     


  • While there is a long-term plan spelt out, it is important to catch the low hanging fruit and clear pending decisions in the pipeline which can get things moving, writes Sandeep Sharma, President, R K Swamy Media Group

    BudgetSpeak #5: Sandeep Sharma: Time to translate intent into action from the Budget

    By Sandeep Sharma

     

    After the new government has taken charge there is a huge expectation on the economic development of the country. The government has also made the right noises on various subjects signalling an intent to progress and accelerate the economy. I would expect a clear policy direction and a roadmap being spelt out clearly on the macro front viz managing inflation, getting infrastructure back on track,  power reforms, railway reforms and agriculture reforms. The government has clearly said that it is for increasing FDI in various sectors to accelerate reforms and hence a timeline to this would help.

     

    While there is a long-term plan spelt out, it is important to catch the low hanging fruit and clear pending decisions in the pipeline which can get things moving. The government needs to show that it can bite the bullet and take some tough decisions ( the recent railways fare hike is one such), diesel deregulation, food bill, their stand on various subsidises and most importantly tax reforms. A single window  clearance is a step in the right direction and it will be interesting to see how they balance environment  clearances and industry development.

     

    I expect the current Budget to state an intent and roadmap  on the issues above and then by next budget in February  put the plan into action. Clear policy-making, fast approvals, accountability and creating an environment of positivity and  economic friendliness is the expectation. This  Budget is the starting point to translate intent into action and thereby come true to people’s  expectations. Personally I am bullish and anticipate a decade of positive growth for the country.

     

    Sandeep Sharma is President, R K Swamy Media Group

     

  • The forthcoming Budget is one of the most anticipated events in the history of India, writes Kartik Sharma, Managing Director of Maxus, South Asia

    BudgetSpeak #6: Kartik Sharma: Budget of Hope

    By Kartik Sharma

     

    I expect the first Budget from the new government to have significant policy changes for both the short- and long-term.  While the list of expectations is large I expect improvements in five areas from this Budget in the short-term.

     

     

    They are :

     

    >> Boosting exports: I expect policy changes to help boost exports for India. The restoration of tax incentives for promoting exports is long overdue and will be welcomed by all.

     

    >> Curbing food inflation: Any and all measures to curb food inflation is much needed. While the government has recently taken some measures in this direction more reforms are expected

     

    >> Infrastructure: I expect government to speed up infrastructural growth for India as a whole with clear timelines. There should be severe penalty on missing deadlines and a transparent way of sharing progress with people.

     

    >> Literacy drive: One of the biggest problems for India is the alarming nature of illiteracy even after so many years of independence. I expect concrete measures from government to accelerate literacy. This one initiative itself will awaken all the citizens of India and lead to great economic prosperity and weed out several social issues.

     

    >> Individual taxation: Last but not the least, I expect increase in limits for deduction for individuals which will encourage savings for the growth of the economy. I expect the present limit of deduction under 80C of Rs 100,000 in respect of investments such as ELSS, life insurance premium, housing loan repayment etc to be increased to Rs 200,000.

     

    This Budget will be one of the most anticipated events in the history of India. This Budget is a Budget of hope. Hope for a better India, hope for removing corruption, hope for equality, hope to live a decent life and every citizen feeling proud to be an Indian.

     

    Kartik Sharma is Managing Director of Maxus, South Asia

     

  • There is a need to exempt milk tanker from the levy of toll charge which is being paid on the express and national highways, writes R S Sodhi, Managing Director, Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF)/(AMUL)

    BudgetSpeaks #7: R S Sodhi: No toll for milk tankers on highways, please…

    By R S Sodhi

     

    A] Income Tax:

    1. Reduction in Income tax on Cooperative Sector :

     

    Cooperative Societies are working for the benefit of farmers and it has brought prosperity especially in the villages. At present, there is no basic exemption to cooperatives under Income Tax Act. Further, the highest tax rate of 30%+10% Surcharge is also applicable on Cooperatives for income exceeding Rs. 20,000/-.  There is a need to give basic exemption of Rs. 5 lacs to cooperatives and reduce the highest rate of tax to 20%.

     

    2. Exemption to Cooperatives from the applicability of Domestic Transfer Pricing :

     

    In Budget for 2012-13, the Domestic Transfer Pricing was made applicable to Cooperatives also. The object of Transfer Pricing is preventing evasion of tax by entering into transactions with associate persons. The meaning of cooperatives is nothing but achieving the common goal of welfare of members by associating various persons. Thus, there is no need to apply Transfer Pricing to cooperatives as the motive is social welfare. The introduction of Transfer Pricing on cooperatives will lead to complications in its implementation without generating any revenue for the Government and only administrative cost will be increased on the part of Income Tax Deptt. In certain scenario, the same cannot be implemented in cooperatives as bench-marking prices for transactions are not available in similar scenario.  The same is possible in Corporate Structure.

     

    3. Exemption to Dairy cooperatives under section-32 AC of Income tax Act,1961:

     

    The benefit of additional depreciation is given to companies only for investment of Rs. 100 cr. or more in Plant & Machinery under section – 32 AC of Income tax Act, 1961 w.e.f. 1-4-2014.  In fact, many expansion projects for more than Rs. 100 cr. are going on in cooperatives. This needs to be extended to dairy cooperatives also.

     

    B] Excise and Service Tax

     

    1. Remove excise from Molasses:

    At present, molasses used in the production of cattle feed and Excise is levied on the same @ Rs. 1000/- per ton.  This is one of the factors which contribute to increase in the cost of milk production.  The Excise on molasses used in the production of cattle feed needs to be removed to bring down the cost of milk production.

     

    2. Exemption of dairy industry instrument from service tax:

    At present, the Service Tax is applicable on the use of cold chain facility for storage of dairy products and on hiring of cold storage.  This needs to be exempted for expansion of cold chain facility, resulting in smooth movement of dairy products from one part of the country to another part of the country.  It will also help to reduce the cost of cold chain facility in dairy sector.

     

    3. Export duty increase for cattle feed raw material:

    There is a need to impose export duty on export of oil-meals, de-oiled cake, cattle feed, etc. It will help to reduce the input cost of the milk producers as the price of these items will reduce due to increase in supply in domestic market.  Export duty of 10% on De-oiled Rice Bran (DORB) was withdrawn in the last budget.

     

    4. Need to remove Excise duty from dairy industry equipments:

    There is a need to reduce the Excise duty on dairy equipments which will result in clean milk production and hygienic milk handling by adopting milking machines.

     

    There is a need to consider the Dairy Sector at par with Agriculture Sector and lending by banks should be considered as priority sector lending which will result in availability of funds at low interest rate to cooperatives.

     

    There is a need to include loan for purchase of cattle under Crop Loan Scheme to farmers under interest subvention scheme where the finance at effective rate ranges between 5% to 6%. At present the average of cost of cattle ranges from Rs. 25,000/- to Rs. 1 lac. The farmers are taking loan at commercial rates from banks.  This will ensure availability of cheap finance to farmers for purchase of animals resulting in lower cost of production of milk and growth of Dairy Sector.

     

    There is a need to exempt milk tanker from the levy of toll charge which is being paid on the express and national highways. In fact, the movement of milk in tanker is done to ensure stable supply of milk in milk deficit areas.

     

    5. Need to adopt Model Cooperative Act.:

    Currently adopted Co-operative Act was implemented during 1912. GoI has already prepared model Co-operative Act for Co-operative organization with several amendment. State Government need to adopt the same for better functioning of Co-operative organization.

     

    R S Sodhi is Managing Director, Gujarat Cooperative Milk Marketing Federation  Ltd (GCMMF)/(AMUL)

     

  • The no service tax concession on advertising in the print media should be extended to other media as well, writes Harish Shriyan, COO, Omnicom Media Group

    BudgetSpeak #8: Harish Shriyan: Exempt small- and medium-sized advertisers from service tax

    By Harish Shriyan

     

    My expectations from the new Budget:

    1. In general, the Budget should focus on containing inflation, investment on infra and power sector and create more jobs.

     

    2. The kind of inflation we are witnessing today, the Income Tax exemption limit for the individual should be raised to at least Rs 5 lakh. This will ensure more money in consumers hand and promote saving.

     

    3. We need to move away from a society of entitlement to a society of opportunities. Hence the Budget should focus on growth and providing more opportunities. The policy on reservation and entitlements need to be revisited. The government benefit should be restricted only to economically deserved and not on the basis of caste or religion.

     

    On the industry front:

    1. As the government wants to cover the whole cable industry to be digitized, providing proper infrastructure, rationalisation of tax and reduction in custom duty for the Set Top Box is important.

     

    2. Implementation of Phase 3 FM radio expansion and allowing news on FM is crucial.

     

    3. Small- and medium-sized advertisers should be exempted from paying service tax so that they can afford to invest more money on advertising and become more competitive in the marketplace. In print, there is no service tax. Likewise, it should be extended to other media as well.

     

    Harish Shriyan is COO, OmnicomMediaGroup

     

  • There will be some steps taken in the next two Budgets to bring the economic growth on track, writes Suresh Balakrishna, CEO, BPN India

    BudgetSpeak #10: Suresh Balakrishna: Govt will have to take tough measures

    By Suresh Balakrishna

     

    To me, it will be a development-focused Budget which means it will be a mixed bag Budget. The government will have to take tough measures. There will be rationalization in tax structure but they will do away with all the retrospective tax schemes which the earlier government was talking of. I hope they will. They will try to drive growth as a major focus in this Budget. May be for retailers, FDI might get a push. There will be some steps taken in the next two Budgets to bring the economic growth on track.

     

    Personally, taxes are already a high, they might go up further. I expect that luxury products will get more taxed. Taxes will also go up for people with a higher income though this is not something I am looking forward to but this might happen.

     

    Suresh Balakrishna is CEO, BPN India

  • The industry would need proper incentives to boost set top boxes manufacturing in the country, writes Anirudh Dhoot, Director, Videocon and President, Consumer Electronics and Appliances Manufacturers Association (CEAMA)

    BudgetSpeak #12: Anirudh Dhoot: Need for incentives for set top boxes

    By Anirudh Dhoot

     

    The consumer durables industry is all set to ride high with the emergence of the new government, as new policies and initiatives will pave the way for growth and advancement. The newly formed government has already indicated a clear tax policy and interest rate rationalization which would help in the growth of manufacturing industries. With the ensuing Budget aiming to stabilize the economy, we expect a turnaround in the consumer sentiments.  The reduction of excise duty in the Interim Budget from 12% to 10% on products, inputs and parts had come as a great relief for the industry and helped the sector. CEAMA welcomes the Finance Ministry’s move to extend the concise duty concession till December 2014. CEAMA would request for this continued support even beyond December 2014 as the industry is still struggling and Index of industrial production has not shown a healthy growth. CEAMA further foresees an improvement in the industry standards, eradication of grey markets and an overall boost to the sector from the new government.

     

    The digitization of cable TV has created huge demand for set top boxes in the country and it is likely to reach 75 million units for next one to two years. Thus it is very important to manufacture set top boxes in the country. However, industry would need proper incentives to boost set top boxes manufacturing in the country. CEAMA recommends that the provision of ‘C’ form waver should be applicable to set top boxes. Currently, Indian manufacturers have to pay 12.5 to 14% VAT as Cable and DTH operators do not provide them ‘C’ Form, since they are leasing out boxes. However, DTH operators do not pay any VAT when they import the boxes. Set Top Box industry provides huge potential for economic activity, employment generation and saving valuable foreign exchange and increased revenue for the Govt.

     

    Recently, CEAMA delegation had a meeting with the Information & Broadcasting Minister and apprised him about the status of DTH industry. We are encouraged on his positive response and expecting a favourable action from the government soon.

     

    1. Steps should the government take to revive the manufacturing sector, in general, and consumer electronics industry, in particular

    The consumer electronics industry is currently struggling due to sluggish market and bleak weather conditions.  In order for the industry to bounce back, CEAMA has proposed recommendations keeping in mind the twin objectives of manufacturing growth and also increasing demand of the products.

     

    We strongly propose removal of the Inverted Duty structure on consumer electronics and home appliances, arising due to implementation of free trade agreements.  We also recommend reviewing the existing FTAs. The government should also accelerate implementation of uniform Goods & Service Tax (GST) that will lower transaction costs.

     

    The government also needs to provide same incentives to Home Appliances Industry which are available to Consumer Electronics Industry under ESDM policy, as Home Appliances contribute substantially to Current Account Deficit of the country. Therefore, there is an urgent need to promote manufacturing of these products and their components within the country.

     

    FTAs have gravely affected manufacturing in our sector. It has also resulted in loss of revenue to the government. CEAMA strongly recommend review of existing FTAs. We urge speedy implementation of Goods & Service Tax that will ultimately lower transaction costs.

     

    There is a general consensus in the country on speedy implementation of GST. Introduction of GST is expected to decrease compliance burden for businesses and will bring down the total incidence of taxes by eliminating cascading of taxes on goods and services. We urge that GST should be implemented soon and the tax system should be made simpler and transparent, so that the honest tax payer is not harassed.

     

    Small TV manufacturers who are making CRT TVs are facing very difficult situation due to demand shrinking rapidly. At present, smaller size LCD/LED TVs are not viable to manufacture due to 10% duty on the panels below 19”.  Therefore we recommended that on smaller size panels, Customs duty should be brought down to 0%, to help TV manufacturers who are SMEs.

     

    The production of indigenous Colour Picture Tube (CPT) has stopped and TV manufacturers in the country have no option but to import CPTs by paying 10% Customs Duty, we have  recommended that import duty on CPT be brought down to 0%.

     

    Anirudh Dhoot is Director, Videocon and President, Consumer Electronics and Appliances Manufacturers Association (CEAMA)

     

  • The motive of the new government is to boost the economy even if that requires some tough short-term measures, writes Dr Amarnath Ananthanarayanan, CEO and MD, Bharti AXA General Insurance

    BudgetSpeak #13: Amarnath Ananthanarayanan: Need for a common fraud detection agency

    By Dr Amarnath Ananthanarayanan

     

    The Union Budget 2014-15 comes with a lot of promise. The motive of the new government is to boost the economy even if that requires some tough short-term measures. There are common expectations on the Budget expressed by the industry on multiple aspects including Motor Third Party de-tariffing, Taxation, FDI in insurance, creation of a Nat-Cat pool, and common insurance database pool including a common fraud detection agency.

     

    The only additional aspect which is not entirely Budget-related though is to get General insurance industry to the forefront and get it a seat on the table on all discussions and actions in the area of financial inclusion.

     

    Dr Amarnath Ananthanarayanan is CEO and MD, Bharti AXA General Insurance​

     

  • The main priorities before the government are reducing food inflation, job creation, energy security, defence and infrastructure, writes Arun Firodia, Chairman, Kinetic Group

    BudgetSpeak #15: Arun Firodia: Need to lay down a roadmap for next five years

    By Arun Firodia

     

    The forthcoming Budget should lay down a roadmap for next five years (if not for next 10 years). The main priorities before the government are reducing food inflation, job creation, energy security, defence and infrastructure. For this purpose :

     

    a) The government should release food grains into market. The government should amend APMC Act and encourage farmers to sell directly to citizens.

     

    b) The government should move towards self-regulation by industries, exempt small industries from Factories Act, relax labour laws and encourage FDI in labour intensive good manufacturing

     

    c) The government should encourage investment in Solar Photovoltaic Electricity and Nuclear Energy to take advantage of great sunshine in India and abundant availability of Thorium

     

    d) The government should establish a strong Navy and locate nuclear powered submarines fitted with guided missiles at strategic places so that no nation dares to attack us and

     

    e) The government should invite huge investment in railways, road and ports. That should be financed by an instrument like ‘Indira Vikas Patra’ where no question would be asked about the source of money but 30% to 40% would be deducted while selling IVP. This would bring all the black money into circulation and that too for the cause of national building.

     

    I look forward to the new Budget with great expectation.

     

    Arun Firodia is Chairman, Kinetic Group

     

     

     

  • Ravi Rao, Leader, South Asia, Mindshare hopes the Union Budget will help his 10 dreams come true

    BudgetSpeak #14: Ravi Rao: 10 Dreams that the Budget should see come true

    By Ravi Rao

     

    Every Budget creates huge expectations and one reads and discusses all rosy dreams with great expectations. Here is my list of 10 dreams:

     

    1. Streamline Income Tax, reduce it to 10% flat so no more tax consultants, archaic tax laws or tax refunds – ensure no one is exempt

     

     

    2. Simplify central and state laws by removing federal taxation policy so one can pay once and not worry about concurrent or multiple taxations for business sectors. Ensure it is tracked and collected fully at one point

     

    3. Why is it that most builders get away with their mistakes or even conscious violation of rules and in the end the buyer stands to strip naked – don’t expect us to know all rules

     

    4. Everyone talks of the black money and I am yet to see one – abolish all CASH transactions over Rs 10,000 if you are really serious about helping the economy and the common man

     

    5. Give us good roads to drive on or simply permit only 4WD. Mumbai is disgusting! Can we get a list of all contractors across India who have worked on at least one road so we can create a new website and put their colour pics out there with the money they supposedly spent on building roads!

     

    6. With almost 70% + reservations for everything, why can’t reservation for women be done across all companies at 50%? Begin with the service industry at least

     

    7. Create the third sex and be done with it – let all the silly moral policing politicos worry about the economy rather than tell people how to walk and dress.

     

    8. Penalise all those who pollute… please see the Mithi river or even the nullahs of Mumbai – we have chemical rivers and rivers of plastic. When can you boldly set foot into the Juhu beach and not feel like getting into a watery ditch?

     

    9. I have turned 50 hoping every year these dreams come true – somehow I keep dreaming.

     

    10. We will be No 1, when 1 USD = I INR

     

    Dream on!

     

    Ravi Rao is Leader, South Asia, Mindshare

     

  • Replaying the MxMIndia series powered by Bloomberg TV India where industry captains highlight their Budget Expectations

    Just a week for Budget Day

     

    Replaying the MxMIndia series powered by Bloomberg TV India where industry captains highlight their Budget Expectations

     

     

     

     

    BudgetSpeak #1: CVL Srinivas: Budget 2014 – An opportunity to reboot M&E

    If Information Technology was the hero of the 1990s and early 2000s, the Media and Entertainment (M&E) Industry has the potential of emerging as the next big growth driver of the Indian economy. Read more…

    		  

    BudgetSpeak #2: Sanjay Tripathy: Long-term financial planning needs impetus

    In the absence of a formal social security framework there is a need to provide tax incentives for growth of disciplined savings behaviour. I believe Life Insurance plays a critical role in using small savings for capital formation. Read more…

    		  

    BudgetSpeak #3: Ashish Bhasin: Need for incentives to do more R&D

    Rationalization
    of Tax Practice on Advertising and Media Industry: Here, specific reference is to the service tax which has to be rationalized. The surcharges need to be removed.     Read more…
     

    BudgetSpeak #4: Anisha Motwani: Need relief in I-T to increase household savings

    With strong fundamentals, the Indian economy has tremendous growth potential. The new government has shown intent in the right direction and the Union Budget must turn them into actions to make a difference. Read more…

    		  

    BudgetSpeak #5: Sandeep Sharma: Time to translate intent into action from the Budget

    After the new government has taken charge there is a huge expectation on the economic development of the country. The government has also made the right noises on various subjects signalling an intent to progress and accelerate the economy. Read more…

    BudgetSpeak #6: Kartik Sharma: Budget of Hope

    I expect the first Budget from the new government to have significant policy changes for both the short- and long-term. While the list of expectations is large I expect improvements in five areas from this Budget in the short-term. Read more…
     

    BudgetSpeaks #7: R S Sodhi: No toll for milk tankers on highways, please…
    A] Income Tax:
    1. Reduction in Income tax on Cooperative Sector :
    Cooperative Societies are working for the benefit of farmers and it has brought prosperity especially in the villages. At present, there is no basic exemption to cooperatives under Income Tax Act. Read more…

    		  

    BudgetSpeak #8: Harish Shriyan: Exempt small- and medium-sized advertisers from service tax

    My expectations from the new Budget:
    1. In general, the Budget should focus on containing inflation, investment on infra and power sector and create more jobs. Read more…

    		  

    BudgetSpeak #9: Amar Babu: Need to rectify inverted tax structure

    This Budget marks the first litmus test propelling the development agenda; the past years have witnessed an economic downturn and a downturn of domestic growth. The Budget should address the issues curtailing investment sentiment and bring renewed optimism for sustained economic growth. Read more…
     

    BudgetSpeak #10: Suresh Balakrishna: Govt will have to take tough measures

    To me, it will be a development-focused Budget which means it will be a mixed bag Budget. The government will have to take tough measures. Read more…
  • The Budget should address the issues curtailing investment sentiment and bring renewed optimism for sustained economic growth, writesAmar Babu, MD, Lenovo India and President of MAIT

    BudgetSpeak #9: Amar Babu: Need to rectify inverted tax structure

    By Amar Babu

     

    This Budget marks the first litmus test propelling the development agenda; the past years have witnessed an economic downturn and a downturn of domestic growth. The Budget should address the issues curtailing investment sentiment and bring renewed optimism for sustained economic growth; conversely the government should quickly amend the policy paralysis with regards to the ease of doing business.

     

    Some important points that the government should keep in mind:

    >> Despite being key to boost domestic manufacturing, component ecosystem is not yet ready in India, for which, government needs to take a series of actions.

     

    >> Stability in taxation and regulatory regime; conducive business environment that include GST rollout; and creation of a robust market for locally-made products are some of the vital elements. There is also a need to rectify the inverted tax structure.

     

    >> The new government would introduce long-awaited GST that would also help GDP to grow, and bring in new investment for the sector.

     

    Amar Babu is Managing Director, Lenovo India and President of MAIT