‘We can see Union Budget 2021 as a beginning of OOH and radio industry recovery’
Experts from both media sectors said that the stock market’s reaction with a positive jump is a good sign for the advertising industry as a whole
The first paperless budget was announced yesterday by Finance Minister Nirmala Sitharaman in New Delhi. This budget of 2021-22 was indeed an enticing session as it is amid a COVID hit economy. As markets have begun to reopen, this New Year is a time to re-write the economic playbook for the fiscal year and reboot the industries. Therefore, this year’s Union Budget was closely looked at as a blueprint for India to get back on track as the world’s fastest-growing major economy.
Two sectors that faced a dent in ad spends were the Radio and OOH sector. The Radio industry suffered grave losses due to the pandemic and saw a drop in their ad spends. This was due to prominent advertisers like the retail sector that weren’t spending prominently. As for OOH, marketers weren’t spending on the medium during the lockdown and there was zero visibility. However, as markets began to open, both radio and OOH saw positive growth, especially during the festive season. OOH saw a ray of hope when traffic mobility increased post-lockdown.
Radio Industry on Union Budget 2021-22
After going through a financial year dominated by ad hoc survival measures due to COVID, B Surendar, COO & Director Red FM Network, shares his perspective: “It is a definite relief to see a budget looking to provide a long term boost to our economy by focusing on some need-of-the-hour areas like Infrastructure, Health, etc. If the gamble to chase growth rather than holding it back on fiscal deficit concerns pays off it will put the corporate and retail sectors back on track. This, in turn, should boost the media industry’s fortunes even though there were no specific or significant provisions in this year’s budget.”
Surendar remarked that from a radio industry point of view, a few important industry categories like BFSI, Real Estate, SMEs/Start-ups, etc would hopefully benefit from this budget.
Prashant Panday, MD & CEO, Mirchi shared, “The FY22 budget aims to spend roughly the same as it did in FY21 - approx. Rs. 34.8 trillion. It plans to fund this by raising fresh net borrowings of Rs 14.4 trillion. This borrowing program will put pressure on inflation, which could prove harmful to the expected recovery. However, the government is undertaking the best measures in face of the current scenario, taking big risks by increasing borrowings and fiscal deficit.”
Talking about the media sector, Panday noted, “As far as the media industry is concerned, there is not much that directly affects it, although overall growth and job creation should lead to a recovery in fortunes. In all, we see the FY22 budget as a good beginning of the recovery effort by the government even though a lot will need to be done in the coming years.”
Sharing Panday’s sentiments, M V Shreyams Kumar, Managing Director for Mathrubhumi Group remarked, “It was a well-thought-out budget based on the 6 pillars and huge support for digital payments by proposing a 1500 crore scheme is a positive step. However, the government failed to address sustainable reforms like exemption of newsprint imports duty or providing stimulus packages for the revival of the media and entertainment industry. The budget focuses on a long term growth but falls a bit short on market expectations for more corrective measures.”
OOH Sector on Union Budget 2021-22
On a positive note, Jayesh Yagnik, CEO, MOMS Outdoor Media Solutions stated, “This is a very good budget overall. All the industries have benefited and overall sentiments have gone up. We all have seen how the stock market has reacted with the positive jump. This is a good sign for the advertising industry as a whole. The advertisers should be able to unleash some of the benefits and that should help the industry. The need of the hour was to put the money in the hands of the people with sustainable growth and I think FM has done a very nice balancing job on this. Bringing investment back in almost all the core sectors be it service or manufacturing. There has not been an increase in the tax burden for people hence one can look into the consumption cycle getting further energized.”
Yagnik added that just like the Sensex, the OOH market is also driven by sentiments and after a very bad 2020, this budget will put things in overdrive. “We all were hoping that the positive momentum which has been generated from the festive season should continue and with the current sentiments post-budget the industry is pretty sure about it. The two of the main sectors like automobiles and telecom were held back last year and these are big. I am hoping with the kind of ease of doing business, we will see revival. Even for real estate which is one of the leading categories for OOH, it will be beneficial especially in lower-income housing, and hopefully, the spending will go up there as well. Overall the media is getting lift thanks to the stimulus provided to the various businesses and the demand which has been created amongst consumers. I am hoping that all of this will be actioned in the first quarter of next fiscal year”, explained Yagnik.
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