Union Budget 2016: Advertising Experts express mixed reactions

The Union Budget 2016 is aimed at boosting growth while ensuring fiscal prudence with a strong focus on the rural sector. We spoke to leading advertising leaders about their views on the latest Union Budget.

e4m by Sarmistha Neogy
Updated: Mar 1, 2016 8:36 AM
Union Budget 2016: Advertising Experts express mixed reactions

The Union Budget 2016 is aimed at boosting growth while ensuring fiscal prudence with a strong focus on the rural sector. However, experts believe that the new budget has the potential to boost the overall economy in the coming years and with introduction of new policies, Budget 2016 is expected to streamline the taxation process too.

We spoke to a few leading advertising  leaders about their views on the latest Union Budget, and here is what they had to say:

Ashish Bhasin, Chairman & CEO South Asia - Dentsu Aegis Network and Chairman Posterscope & MKTG - Asia Pacific

Overall there are some positives and some negatives in the budget. On the positive side not increasing the service tax is a positive, particularly for the advertising and media sector. General expectation was that Service Tax may go up in anticipation of higher GST rates. Controlling the fiscal deficit and several steps to invigorate the rural economy and rural consumption are positive signals. A rural consumption revival will help the economy and the advertising and media sector tremendously. On the negative side there was an expectation, based on what the Finance Minister said in the past, that corporate tax rates would come down. That is not to be so for most large companies. Introducing double taxation on dividends is also a negative.  In balance this seems to me to be a mixed bag budget with a positive bias. If it is able to spur overall economic growth, we could see good times ahead for the advertising and media sector.

Debraj Tripathy, Managing Director, MediaCom:

One of the key things that I was looking forward to was easing up of service tax payment for the industry. There has been no reference to this in the Budget, so things stand as they are. Secondly, the proposal to reduce basic custom duty on wood chips and particles for manufacture of paper and newsprint, from 5% to 0, will bring down newsprint costs for the print industry. Proposed change in excise duty structure on STBs, routers and modems will lead to lower STB prices. A definite positive for cable and DTH companies

Dhunji Wadia, President, Rediffusion Y&R:

The Budget is aimed at boosting growth while ensuring fiscal prudence.  It is also about ease of doing business; taxing the rich and giving incentives to the poor.

N Ramamoorthi, Managing Partner - Mumbai & Kolkata, Ogilvy India

To me, this is a Budget made for what I call "the minority multitude" - the crores of farmers, small shop owners, rural citizens who make up the larger part of the country, but don't have the same share of voice as Urban India. In line with its theme, the Budget is truly transformative and has the potential to equalise and bring the two Indias closer for mutual benefit.  What is important is that the Budget is not just about sops - it is also enabling in nature. You see this in a lot of the outlays - whether the Rs. 1,700 crore for multi-skill development, digital literacy for 6 crore households, rural electrification, e-platforms for farmers and hubs to support SC/ST entrepreneurs. Even the LPG connections for rural women could spawn off some form of entrepreneurship. 

India's biggest asset is the size of its population. As an integrated communications professional, I am excited by the potential customer value the budget unlocks from this population across sectors like FMCG, financial services and real estate. I can also see an increase in reverse trade - all the investments in farming leading to fresher, more organic produce on urban retail shelves. Not to forget a potential 6 crore addition to an already burgeoning mobile social media industry. As a country, it would be great to make a commitment - to not look at Budget 16 as a one year exercise but as the start point for long term priorities. 

Vandana Das, President, DDB Mudra, North:

One of the things which stood out this year is that it is a Green Budget, there will be no hard copy and everything is available online. It is a transformatory Budget, focusing a lot on rural, Make in India, farming and irrigation. On one hand, when I started to think that it won’t make much of a difference to my life, then I came across reports of cars, branded clothes and aeriated drinks getting costlier. So from a political standpoint, the Budget is largely balanced without upsetting the majority of the population.

Saurabh Dasgupta, ECD, Innocean Worldwide:

Growth in India has traditionally been fuelled by urban demand. I see very little or practically nothing proposed for this group of consumers. Other than a few positive policy decisions proposed for the housing sector, I personally find the Budget flat.

Naresh Gupta, Managing Partner, CSO at Bang in the Middle:

What jumps out at me is the increase in Service Tax; this makes life difficult for the entire advertising industry. However we had not expected a reduction in service tax. Overall, the Budget will impact the rural economy, and thereby impact overall economy.

Anshul Sushil, Co-founder, Boring Brands:

Budget 2016 is a positive move which reaffirms the Government's commitment towards creating a conducive environment for start-ups in India.  Sops like financial incentives in the form of tax holidays and scrapping capital gains tax, if money is reinvested in the business, are path-breaking steps. However, it’s time that the government ensures immediate implementation of GST because it has hampered the entrepreneur’s confidence, especially for start-ups. The government also hasn't mentioned any time frame for setting up new incubators, which the government had announced with much fanfare as part of the ‘Start-up India’ action plan.”

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