Two words sum up the essence of Budget 2015: balance and clarity. Finance Minister Shri Arun Jaitley walked the tightrope by staying away from big bang announcements that might have strained the fiscal position, while taking substantial steps on matters of tax, social security and public investment (especially in Infrastructure). On the reduction in corporate tax rates to 25%, the 4-year implementation roadmap is a welcome addition. This is the clarity that the corporate sector needs as far as tax policy is concerned.
While personal income tax slabs remain unchanged, higher exemptions are targeted towards savings and would add to retirement incomes in taxpayers’ wallets. 'Wallets' too will don a different connotation given the FM's vision for a cashless society. The clarity on the corporate tax reduction road map is a welcome development for investments in the Indian M&E sector.
The industry demand for reduction in withholding tax rates (to 10%) on royalty and FTS payments to non-residents has finally been granted. The increase in service tax is probably to bring the rate closer to the rates expected under the GST regime. In that context, the step is the proverbial bitter pill for our industry. There has been some reduction in the customs duties for certain categories of TVs and their components. Hopefully, this will make ‘Manoranjan’ more affordable.
The setting up of a Centre for Film Production, Animation and Gaming in the North East is also noteworthy. In fact, as an industry we must focus on this region given its natural beauty and picture-perfect shooting locales. I hope that other states follow Andhra Pradesh’s example and quickly execute their portion of the National Optic Fibre Network (NOFN). Our consumers have become screen agnostic and we need to ramp up our digital infrastructure to keep pace with their needs.
I must compliment the FM for his announcement of social security schemes for the vulnerable sections of society as a vital cornerstone towards inclusive growth and development. This year’s budget seemed like the perfect opening innings of a test match. For India to ‘fly’ (and fly it will), the foundation of its ascendance needs to be strong. This budget has done just that by placing our country on a strong footing.
As a sector, we mustn’t forget that a large part of our growth potential can be unleashed by policy announcements that lie outside the ambit of the Union Budget. These are exciting times for our sector and I am certain that the government will not disappoint us in the coming months. All in all, this is a 'Make in India' budget that will truly 'Make India’.
The author is Chairman, CII National Committee on Media & Entertainment, and Group CEO, Viacom18 Media.