The 2014 Union Budget left a lot of people scratching their heads even as many others hailed it as progressive and growth-oriented. Leading to the Budget, Information & Broadcasting minister Prakash Javadekar had been vocal about shortening of processes and finding solutions to some of the hurdles in front of the private FM industry. The industry was hoping that decisions would be taken regarding FDI, tax rationalization, etc. However, despite a high-level of positivity and expectations, the Budget turned out to not have any major announcements for the radio sector, apart from an allocation of Rs 100 crore towards community radio.
Radio players seek uniform laws, higher FDI & tax relaxation from Budget
“There is nothing in this budget for the radio industry. The industry is now looking forward to the speedy implementation of Phase III policy so that the radio industry is also allowed to grow and reach its potential. We do hope that all impediments will now be removed and the bidding process starts soon,” said Nisha Narayanan, COO, RED FM.
Other players are also hopeful that, despite some disappointment, the government will work towards starting the Phase III allocations quickly. In fact, as Tarun Katial, CEO of Reliance Broadcast Network, puts it, "With not much for the media and entertainment industry in the budget, there would be anticipation of a further announcement in line with the policy initiatives, especially for the radio sector.”
All eyes are in fact on the Phase III auctions, with players still awaiting clarity on certain key issues. (FM Phase III auction set in motion with MIB likely accepting TRAI's proposals). One of the key suggestions made by TRAI in its recommendations to the MIB was to increase FDI in private FM. This will be a key decision by the government as the FM industry gears up for further expansion.
“We would have liked the government to take steps to increase the FDI limit to 49 per cent from the current 26 per cent. With Phase III auctions awaited, the increase in FDI limit would have opened the doors for fresh investment giving that much required boost to the radio industry,” Ashit Kukian, President & COO, Radio City 91.1 FM.
However, Prashant Pandey, MD & CEO of ENIL is still optimistic that the various economic and tax reforms introduced will spur growth leading to a revival in advertising spends, though he hoped that the government will expedite renewal of Phase II licenses by accepting the TRAI formula and will conduct Phase III auctions on time as promised.