Being pegged as a growth-oriented budget for 2021, experts cite that A & M industry could benefit from the increased focus on digital and higher investment in MSMEs.
In the wake of the pandemic, as Nirmalya Sitharaman presented the annual budget for the fiscal year 2021-22, the A & M industry leaders looked forward to a significant era of change and a period of respite. As reported earlier, this included the need to drive consumer demands, investing more in start-ups and MSMEs, focus on varied media channels, and rationalization of taxes, amongst others.
With INR 4071.23 Cr to Ministry of Information and Broadcasting and INR 2640.11 crore towards Prasar Bharati, followed by a specific focus on MSMEs with a digital approach, is a welcome move, share the experts. They opine that the budget is a growth-oriented one and helps pave the way for recovery.
A quick look atBudget 2021-22 reactions from A & M Industry leaders.
Ashish Bhasin, CEO-APAC and Chairman-India, Dentsu, shares, “It is clearly a growth-oriented budget. I am particularly enthused about the investments in Infrastructure and Health. What is also good is that the taxes have not been raised and the process of taxation has been attempted to be simplified. Disinvestments and Borrowings have been proposed as the preferred funding route, rather than increased taxation, which is helpful.
Further, he adds, “I also like the thrust towards increased usage of digital, including in governance, starting from the symbolic usage of an India-made Tablet to read the budget from, by the Finance Minister. Hopefully, this should bring our GDP growth into double digits making India the world’s fastest-growing economy this year. Whenever the economy does well, the advertising industry benefits.
Nikhil Rungta, Country Manager, India, Verizon Media, says, “This is a ‘get well’ budget with an expansionary outlook and focused on growth. Given the times it might not be a radical budget, but it is practical and thoughtful, which will propel consumption and growth of businesses. This budget has also rightly signaled the need for greater inclusion in India’s workforce. Women being allowed to work in all sectors and in night-shifts with adequate protection, and social security benefits extended to gig workers will provide an impetus for women to step up their contribution towards Aatmanirbhar Bharat.”
Rohan Bhansali, Co-Founder & Director, Gozoop, highlights, “While I would not term it as a ‘Never Seen Before Budget’, the good news is that there were no negative surprises for the corporate, startup as well as digital India.”
He re-affirmed that apart from encouraging macro narratives of disinvestments, infrastructure, NCLT strengthening, etc., perhaps, the biggest takeaway was that the budget speech was delivered by the Finance Minister on a ‘Made in India’ tablet. The medium itself was a message. A message of a more confident, self-reliant, and digitally-led India.
Sandeep Sharma, President, R K Swamy Media Group, says, “It is a good progressive budget and has considerable positives to driving India‘s growth post covid era. The increase in capital expenditure added spending on roads & infrastructure, augmenting railway infrastructure, urban infra will give an impetus to industry activity and generate jobs. Further direct tax reforms and easing the tax compliances are a progressive step forward. Going forward industry would look forward to rationalizing GST further and increase spending power in the hands of the common man by a cut in personal income tax rates. Nowadays reforms are an ongoing process and budget is meant to be a macro statement of policy intent and to that extent, it has been a good & balanced budget.”
Ambika Sharma, Founder & MD, Pulp Strategy, puts forth, “Doubling of MSME allocation, setting aside Rs 15,700 crore for medium and small enterprises in FY22, comes as a welcome move. Increased inclusion of women in the workforce is a good move and will have a long-term positive impact on household income. The services sector has a negligible focus in the budget.”
Anurag Bansal, Chief Operating Officer & Chief Financial Officer, DDB Mudra Group, says, “The biggest good news coming out from this Union Budget is no negative tax on corporates as well as individuals and no Covid cess. With the big push on infrastructure and healthcare spending, corporates in these sectors stand to gain. Raising resources without increasing taxes, powered by massive borrowings are the key highlights of this Union Budget. It will enable the Government to invest in growth impulses leading to structural changes in the economy. This will help in capital formation in real assets and demand generation. The time limit to reopen tax assessments is reduced to 3 years from 6 years, coupled with ease of tax compliance, which will simplify business challenges.
Overall, Indian economy’s recovery from the impact of Covid-19 has been much better than expected, leading to a spectacular bounce back in consumer sentiments. Advertising and media stand to gain as the economy picks up momentum and clients resume their spends. And with the focus of Budget 2021 on capital expenditure and nation building, it augurs well for consumers, markets and businesses.”
Praveen Nijhara, CEO, Hansa Research Group Pvt Ltd, says, “The budget gave a strong feeling that the government is very keen on making sure that the rural-urban divide is bridged, and quickly. Rural economy has reported heartening numbers and one believes that India’s post-COVID recovery will be triggered from the villages and towns. The budget does well to make sure that the government spends towards making society more equitable. One would have hoped for some relief to income taxpayers keeping in mind the tough year gone by, but I suppose the FM won’t hesitate in revisiting that part of the budget if need be.
As a research & insights firm, we are very happy with the Rs.3,768 cr allocation made for the census. The fact that this will be India’s first digital census is only the icing on the cake and we very much look forward to seeing it happen.”
Ajay Verma, Managing Partner, and Co-Founder, Enormous Brands, quips, “A budget with good intentions – But unlike earlier decisions hope its thought through. For example, Scrapping of personal vehicle in 15 years with no mention of the vintage vehicles and their fate. Or extending the start-up tax holiday, without looking at their rich and international investors/ owners. Or increasing the trade deficit but letting go scot-free the International (Social) media platforms like FB and Google who are garnering huge revenues but not paying the right taxes. It is important that this Govt understands, evaluates, and implements its good intention in a thought-through manner.”
Anand Bhadkamkar, CEO India, Dentsu, “It is definitely a growth-oriented budget. The Finance Minister has done an excellent job and has made sure that there is no increase in taxes. The disinvestment of PSU banks, LIC, consolidation of SEBI Act, etc. are the right steps ahead and we need to see how she will deliver on that aspect. What really impressed me about this budget are the six Pillars – one of which is minimum government and maximum governance, which is also very important in the corporate world.”
He also shares, “Another beneficial move is the tax relief offered to senior citizens, which is excellent administratively. Insurance and Healthcare have been given a huge boost. Similarly, easing of business rules for NRIs is a step in the right direction. Instead of taxing the taxpayer, the Finance Minister has ensured that the revenue comes from smarter allocation of available resources and better tax management. As a salaried person, I would have liked more benefits. However, aforementioned, we expected positive consumer sentiment to be created by the budget and I am optimistic that this budget is going to do so. The budget aims to bring down the fiscal deficit; and largely sectors like Infrastructure, Healthcare, Education, Automobiles, etc. are seeing positive momentum.”
“If you see the social sector from an economic growth perspective, which needs to be pushed from the grassroots level, this budget is providing the same with infrastructure development. This can lead to a domino effect for development. Likewise, from the advertising sector perspective, the feeling is similar. Though there are multiple factors involved. If you go category-wise such as FMCG, Consumer Durables, and Auto, there is positivity and we expect spends from them. Mobiles are likely to get costlier. But the government has given more relief to domestic industries to support Atma Nirbhar Bharat. For the Media & Advertising industry, it is a growth-oriented budget that is likely to support growth in advertising and marketing spends as well,” adds Bhadkamkar.
Siddharth Devnani, Co-founder, Director, SoCheers, encapsulates, “Overall, the correct seeding strategy seems to be in place for a growing economy. I applaud the FM for making progressive moves for the benefit of the overall workforce.”
Devnani believes that there are three points which will have a direct impact on the A & M industry as well:
- Social security benefits to be extended to gig and platform workers for the first time. Minimum wages will apply to all categories of workers: FM
- Digital census budget allocated 3700cr- As an advertiser, the data which will be made public after the census would be instrumental in understanding the demographics of the country. The data mining capabilities have evolved manifold since the last census. This has the potential to lead to a lot of new insights.
- Tax benefits for startups -The announcements under this sector are promising. Though one will have to wait for the details before making a conclusive opinion about it. But if all of them are implemented, they will definitely be extremely helpful for startups – the future of the country and MSMEs – the backbone of the economy.