The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making high growth strides.
This year the budget 2020-21 will be presented on 1 February, and the economic survey will be out on 31 January. Last budget it was highlighted that the centre will attract more global investments, not only that the Government said they will further consider opening up of foreign direct investment (FDI) in aviation, media, animation and the insurance sector in consultation with stakeholders, finance minister Nirmala Sitharaman said while presenting her maiden Union Budget.
She said the government will likely permit 100 per cent FDI for insurance intermediaries. Despite global headwinds, India’s FDI inflows rose six per cent in 2018-19 to $64.37 billion, she added.
“I propose to further consolidate, the gains in order to make India more attractive FDI destination. The Government will examine suggestions of further opening up of FDI in aviation, media, AVGC (Animation, Visual effects, Gaming and Comics) and insurance sector in consultation with stakeholders,” Sitharaman said.
Lets have a look at the government initiatives which aimed to shape the year 2019 of AVGC industry . According to IBEF, the Government of India has agreed to set up the National Centre of Excellence for animation, gaming, visual effects and comics industry in Mumbai. The Indian and Canadian Government have signed an audio visual co-production deal to enable producers from both the countries exchange and explore their culture and creativity, respectively.
Although the Government of India has supported Media and Entertainment industry’s growth by taking various initiatives such as digitising the cable distribution sector to attract greater institutional funding, increasing FDI limit from 74 per cent to 100 per cent in cable and DTH satellite platforms, and granting industry status to the film industry for easy access to institutional finance.
Here is what few industry veterans have to say about the upcoming budget 2020:
Punnaryug Artvision, founder, Ashish S K says, “After the re-defined 100 per cent FDI in AVGC sector from last budget, it’s critical that the long standing demand of DD KIDS – An Animation content free to air public broadcasting channel for 2 to 14 years kids gets announced and starts in 2020. More over the National Centre of Excellence for Animation, VFX, Gaming, Comics and AR – VR also see the light of the day in 2020. More important for the industry is to have a National AVGC Policy and also its implementation guidelines at the same time. The AVGC industry can see the roll out of the good work, policies, projects, schemes and other initatives in support of the AVGC sector by the government, are duly communicated to the stake holders and benifits are passed on to all concerned.”
TVAGA president and Green Gold Animation founder and managing director Rajiv Chilaka says, “I am looking forward to hear what the budget holds in terms of opening up of FDI in the AVCGI industry. Interesting times awaits if it happens. On a related note, will keep an eye on the Service Exports from India Scheme as well this year. Extending the benefits offered under the SEIS to include animation and visual effects will help provide a boost to the industry. I believe this will make the sector more competitive as it will help alleviate the associated costs involved.”
Being an avid observer, Indiantelevision Dot Com group founder and CEO Anil Wanvari expressed “The economy is under pressure. Animation, VFX and gaming studios have been really working hard to get in outsourcing of work from international players and have met with success, thus contributing to India’s GDP. Small studios are exporting their services. Altogether they are providing employments to hundreds of thousand. Most state governments are supporting the AVGC industry. It is time that the central government too came up with new incentives, may be with tax credits or write offs or sops for the sector so that it can get a further boost. South East Asian governments, Korea and China, Taiwan are getting a lot of support from the centre to build their brand globally. The government can support the AVGC sector under the commerce ministry.”
Bhasin Group director Ankur Bhasin says,”While AVGC continues to be a sunrise sector for India, a direct allocation of budget towards the sector is not expected in budget 2020.”
On reforms he further expressed, “India continues to reel with acute shortage of skilled manpower in AVGC sector. An estimate pegs this shortage in excess of 35,000 people. As the original content wagon of India is slowly picking up, studios are clamoring to get the best talents. A subsidy for upskillment of the existing workforce and a subsidy for training on the job / internships will help improve the quality of workforce and augment the numbers.A dedicated market access scheme for AVGC sector will further help bolster the exports and increase the influx of international work.Reduction in GST on AVGC services will also have a substantial impact on the complete ecosystem.”
Apart from AVGC Industry here is what technology people had to say:
Tech Mahindra managing director and chief executive officer CP Gurnani, says “Realising the dream of India becoming a five trillion dollar economy by 2025 truly outlines the ‘art of possible’ and depends largely on the choices we make. Digital continues to be the cornerstone of India’s strategy, therefore, sharpening focus on enhancing skills in new age technologies like 5G, improving the quality of education, and nurturing the start-up ecosystem are some key measures that will accelerate India’s IT exports and will help sustain its global competitiveness. As part of the Union Budget 2020, we hope to see focused initiatives by the government that will help India fortify its digital growth momentum and contribute to the global growth story. With 1.3 billion consumers and a large talent base including over 400 million millennials, India can play a key role in scripting a unique success story amidst the global economic slowdown.”
Barco India managing director, Rajiv Bhalla shares, “Barco India As the country gears up for the Union Budget on 1 February, the Indian economy is dealing with several issues including a drop in GDP, liquidity crunch, rising inflation and low tax revenue. While the Centre took multiple measures to boost the slowing economy, some of which have borne fruit, we believe that more steps are needed, especially in promoting growth in rural consumption and labour-intensive segments. Barco remains positive on the India growth opportunity and we look forward to favourable measures from the Centre, predominantly in the technology-enabled sectors and the domains we cater to – medical imaging, smart cities, technological innovation in tourism, among others.”
TheSmallBigIdea CEO & co-founder Harikrishnan Pillai says, “Advertising thrives on the growth in other business. Sectors like FMCG and Auto have had a strenuous time lately and some relief their way would bring a positive blip across. A more transparent and simplified tax regime, especially while dealing with digital platforms with their HOs outside of the country. Efforts to digitise Bharat should be a core focus with incentives being made available to entities driving change here. There is a likelihood of increase in the price of data which would be detrimental to the entire ideology of digitisation. Effort to make free data available or subsidy especially for education and healthcare sector will be a great boost for these categories. Effort to educate youngsters on digital will prepare the economy to fill the talent gap.”
This is probably the first time after 2015-16 when the Budget will be presented on a Saturday will observe what budget 2020 has to offer .