The Union Budget 2014, presented by Finance Minister Arun Jaitley on July 10, has been a mixed bag for the print media industry. While on the one hand, the print industry is happy about remaining exempted from service tax on sale of advertising space, on the other hand, for cross-media owners, owning a digital company or being present on the digital platform will not allow them to be exempted from service tax on online and mobile advertising.
exchange4media spoke to some print players in the South to get their views on the Budget and how much of their expectations have been met. There have been mixed reactions from the Southern print players to the Budget.
B Srinivasan, MD and Publisher, Vikatan Group remarked, “‘Ache Din’ had ushered great expectations of Budget 2014.” However, he felt that that the Budget has fallen short of some of the industry’s expectations.
Srinivasan said that for the middle class, income tax exemption limit ought to have been extended to Rs 3 lakh to tide over the huge inflation and dip in savings. The remaining benefits of increase in 80C (from 1 to 1.5 lac rupee) and exemption for interest on home loan will benefit only the highest tax bracket people.
“For business houses, the Budget proposals are business neutral, save for investment allowance and REITS, and even in the latter, DDT is complicating the ‘pass through’ claim of the FM,” he added.
According to Srinivasan, there is no deadline set for GST and with states yet to accept the terms, it seems to become another 'Acche Din’ promise, than a potential for fruition. On the other hand GAAR to continue is still a worry for foreign investment. There is no big push for reforms except in defense and insurance. Infrastructure requires huge reforms close to over 1 trillion dollars whereas the allocation of 37,880 crores barely covers 5 percent of that.
Kurien Abraham, Editor & MD, Dhanam Magazine said, “People had great expectations about the budget. But it failed to generate enthusiasm and excitement. The Finance Minister could have kick-started some new, great initiatives and could have sold the idea that this was only the beginning of a great journey. The exemption from Service Tax to print industry is definitely helpful as it is struggling from the general slowdown. Its true FM touched upon many areas, but did not reveal his end plans. Naturally, many are disappointed.”
Talking on the budget deficit, Srinivasan pointed out that the FM is relying 18 percent increase on non-corporate revenue to achieve the target of budget deficit of 4.1 which is practically impossible. He added, “Economists think that the actual deficit for FY13-14 would be around 5.5 and not the claimed figure of 4.6. Moreover FM is relying on disinvestment target of 63.425 crores. This is again a daunting task --even during the bull run of market in 2007, the disinvestment achieved was around 38,000 crores only. With monsoon likely to play spoilsport and inflation may raise its head again leaving interest rates to go up. MSME sector has been allocated 10000 crores fund. If this is properly planned will improve the climate at the bottom of pyramid.”
On the other hand, Martin King, GM & Marketing Head, Dinamalar said, “It is a definitely a positive budget. When the new government came into force people wanted change. It is not possible to have miracles from any newly formed government at any point in time. Budget 2014 is a stimulus of so many good things to happen in future. From advertising perspective, things were and are little slow in the first quarter as the entire corporate and advertising industry was wiped off due year end and the elections round the corner.”
His sentiments are echoed by Narendra Kumar Alambara, COO, Sovereign Media Marketing (Dina Thanthi), “Though the budget could not be stated as a ‘perfect budget’ but is definitely a growth-oriented budget. There are enough elements to stimulate growth and one need to outweigh the good over the bad. This Budget will encourage investment and revive the economy. What is important is the implementation of what has been promised by the FM in the Union Budget 2014.”
Service Tax Exemption
Some experts believe that service tax exemption to print industry will be beneficial, as it will provide more bang for the buck for print advertisers. More money in the hands of the advertisers should encourage the print publishing Industry to grab that with more innovations. Experts also think that the government should have waited before taxing the digital medium, as it is at its nascent stage and digital as a medium was all set for an explosive growth. But levying service tax may become a hindrance to the growth to Digital media.
Srinivasan opined, “Though BJP had only 45 days to plan the budget, taking into the promises that they made before election claiming to have a master plan for the good days, it looks they have missed a great opportunity. It looks like an extension of Congress policies and Mr Modi has not stood out. Having said that, it is still not late for the government to correct policies and execute well, something the previous UPA government could not do due to its coalition partners.”
Subsidy reduction and controlling government have not been addressed. Conviction is missing and clear roadmap to achieve targets is not laid out. Yet the regional print players are optimistic that the new Government will speed up the revival of the economy which will indirectly benefit them.