The Union Budget 2014 has some positive developments in store for the media and entertainment sector, especially those relating to budgetary allocations for the sports sector and the National Centre for Excellence for animation, gaming and visual effects.
Budgetary allocations towards upgrading sports infrastructure, training, nurturing best talent and setting up a sports university are in the right direction, though the funds allocated are significantly less than what are needed, noted Smita Jha, Leader - Entertainment & Media Practice India, PricewaterhouseCoopers. The Government also recognises the fact that this sector requires significant investment.
PwC has been closely involved with the Government for conceptualisation of the National Centre of Excellence on Animation, Gaming and Visual Effects.
PWC has also welcomed Finance Minister Arun Jaitley’s comments on promoting FDI and expect that it will translate into 100 per cent FDI being allowed in sectors of media industry such as television broadcasting, cable and DTH, the proposal for which is already pending with the Government. Expediting the FDI increase will help provide the much needed stimuli to the third and fourth phases of digitisation. “We also believe the reductions in customs duty on LCD and LEC of sub-19 panels will also indirectly provide filip to the national digitisation agenda,” Jha added.
Budgetary allocations for promoting community radio are also welcome, though the sector policies need re-visiting to ensure the viability of these stations on a long-term basis, a PWC note said.
While some sections of the industry are not happy with the online and mobile advertising being included under the service tax, PWC sees the philosophy of pruning the negative list in order to promote GST in the industry as a step in the right direction and thus, inclusion of such services in the taxation is a small price to pay in the short-term.
“Announcement of the launch of Kisan TV and Aruna Prabha TV are also welcome in the context of their respective situations, but we hope that these channels are commercially viable and do not add further burden to public service broadcaster Prasar Bharati, which is already under severe financial pressure,” Jha added.