100% FDI for distribution & STB manufacturing are sustainable solutions: Sudhanshu Vats

Sudhanshu Vats, Group CEO, Viacom18 talks about digitization, taxation & licenses and other key issues the Modi government should address with the Union Budget 2014 to boost the M&E industry

e4m by Abhinn Shreshtha
Updated: Jul 2, 2014 7:56 AM
100% FDI for distribution & STB manufacturing are sustainable solutions: Sudhanshu Vats

Sudhanshu Vats is Group CEO, Viacom18 Media and Chairman, CII National Committee on Media & Entertainment. He has been leading Viacom’s portfolio of entertainment brands as well as lines of business such as consumer products, integrated network solutions and digital media. With the union budget set to be announced soon, we ask him about his thoughts and expectations on certain points relevant to the M&E industry. Excerpts.

Compared to the 2013 Budget measures for M&E sector, what are the key areas/issues that the government should address in the 2014 budget?

Accountability is the need of the hour. The new government arrives with a promise of transparency. First, a single-window clearance mechanism for permissions, especially for films and events, will motivate the industry to concentrate more on revenue streams rather than go around in circles.

The wishlist would remain only partially addressed without queries and licenses becoming more time-bound. And while we expect an evolution in policies, keeping them clear and consistent with foresight at the back of the mind constantly, future action can be planned at the organizational level with greater certainty and generate opportunities for employment in large numbers, thus contributing significantly to the economy.

The increase in custom duty on set-top boxes last year was criticized by many. In your opinion, with rapid digitization a key agenda for the country this year, will reducing this custom duty help?

Indigenization of complete infrastructure and a 100 per cent FDI for distribution as well as STB manufacturing are sustainable solutions if they are met in proportional timelines hand in hand with digitization. Also there exist several layers of taxation.
If rationalized, the reduction in custom duty will definitely make investment in the M&E sector at large far more promising, in turn resulting in generation of employment and boosting manufacturing.

What are the steps that the government should take to rationalize taxation on cable and DTH services across the country? Which is the ideal solution that will benefit everyone?

During the recent CII roundtable with Minister for Information and Broadcasting –Prakash Javadekar and my esteemed colleagues from the industry, we made some recommendations on the DTH module. DTH operators end up paying 33 per cent of their revenue as taxes. It’s the only category that pays taxes to both, the state as well as the centre.

I think it is fair to demand a reduction in license fee, which was recommended four years back. In the case of Antrix’s offerings –frequency coordination as well as satellite approvals – why not have one-time fees instead of DTH operators having to pay recurring commissions? Also, in anticipation of GST implementation, entertainment and service taxes can be lowered to a more reasonable level.

Do you think FDI limit in news media should be increased?

During the CII CEO Roundtable, my colleague, Aroon Purie (Founder and Editor-In-Chief of India Today), representing the print industry, made it amply clear that from the current 26 per cent, FDI in the print news industry can be raised to 49 per cent without any negative repercussions.

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