Media and Leisure Business: Expectations from the Price range 2023

The Indian media and leisure (M&E) trade is a promising sector for the economic system and is making vital progress when it comes to development. The rise in digital adoption, quick and reasonably priced web, a big smartphone and broadband userbase, and an increase in gross sales of client durables like smartphones have contributed to the expansion of the sector.

With “digital” holding the pen and outpacing all different segments, sections like OTT, gaming, animation, and VFX are main the M&E sector and are anticipated to rule the market within the coming years. Indian OTT platforms are within the scaling stage with robust subscription development and vital investments in premium and authentic content material.

Additionally, gaming, notably cellular gaming, has gained traction, primarily on account of influencer-driven content material, stay streaming, and the rising reputation of the esports trade. Based on Make investments India, on-line gaming was valued at $1.2 billion in 2021, witnessing a YoY development fee of 28 per cent, and is predicted to succeed in $1.9 billion by 2024.

Although at the moment contributing lower than 1 per cent to India’s GDP, the fast-growing M&E sector is projected to succeed in $100 billion by 2030 at a cumulative development fee of 12 per cent, based on the Ministry of Data and Broadcasting. A number of authorities initiatives like 100 per cent FDI allowed in teleports, multi-system operators, cellular TV, cable, and direct-to-home (DTH) satellite tv for pc platforms; 100 per cent FDI allowed in publishing/printing of scientific and technical magazines/ speciality journals/ Periodicals underneath the federal government route and granting trade standing to the movie trade for straightforward entry to institutional finance, have offered a lift to the sector.

Furthermore, the federal government’s plans to return out with a “Mannequin Theatre Coverage”, “single-window clearance for theatres”, and arrange an animation, visible results, gaming and comics (AVGC) process drive point out their intent to give attention to the sector, which has lengthy been uncared for.

Nonetheless, historically, the Union Price range bulletins haven’t positioned a lot emphasis on this sector, which has been devoid of main sops. That stated, M&E as a sector have to be seen when it comes to its contribution to an ecosystem within the type of job suppliers, development alternatives, oblique affect on different sectors reminiscent of {hardware} and tech gear, and contribution to showcasing or serving to construct the nation’s model picture.

On the subject of that, a few of the key trade expectations from the finances this 12 months are:

* Take into account granting infrastructure standing (infrastructure constructing enterprise) to the media trade, which may ease getting monetary credit and availing tax incentives from the federal government.

* Tax breaks / tax holidays for gaming start-ups to spice up manufacturing of Indian IP, R&D, and enhance the influx of investments.

* GST rationalisation for the radio sector that may stimulate development, in addition to integration of know-how and digitisation throughout distant areas to strengthen the viewers base. Additionally, streamlining the annual license charges and lengthening the license interval can present a lift to the radio trade.

* Help from the coverage makers and regulators to deal with a number of points confronted by the broadcasting trade, reminiscent of New Tariff Order, piracy, and many others. The trade expects “light-touch regulation” which can promote newer and rising areas like OTT.

* Rationalisation of excessive GST charges levied on stay leisure and theatre tickets.

* Taxation on Digital Digital Asset (VDA) has resulted in a shift in commerce volumes from home centralised digital digital asset exchanges to overseas ones. A progressive tax construction that may restore client sentiments and convey again the revenues could have to be thought of. Additional, taxability of VDA additionally relies upon upon its location (i.e., situs). Clear guidelines for figuring out the situs of VDA would help in lowering potential litigation. Leisure within the withholding tax charges relevant to non-theatrical rights would help the sector considerably in managing their working capital.

* Extension of the good thing about carry ahead of tax losses in instances of company restructuring, reminiscent of mergers, demergers, and many others., to the M&E sector could be a key driver to bringing in enterprise synergies amongst the trade gamers.

* Readability is required within the taxation mannequin for the net gaming trade, not solely when it comes to the GST fee, but in addition in different points reminiscent of tax on platform charges or gross gaming income (GGR). Regulatory readability within the gaming sector can be what the trade wants.

* Additional steps or coverage measures within the authorities’s enthusiastic about the way it intends to contemplate and transfer forward with the suggestions of the AVGC process drive. Developments like consolidation, growing display screen time, NTO2 implementation, which may give a fillip to subscriptions in broadcasting, the digital house exhibiting a excessive development fee and the popularity of AVGC as a future development driver, and many others. level to a really thrilling future for M&E enterprise. Whereas the federal government has begun to recognise the sector’s potential by way of numerous coverage measures, a budgetary focus with the required readability on regulatory and taxation points may present the required impetus. General, the dynamics of the sector are fast-paced, and coverage responses ought to be in tandem with the tempo of change.

(The creator is companion (danger) and sector chief (media & leisure) at Grant Thornton Bharat LLP)

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