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NEW DELHI: In the initial reactions to the 2007-08 budget
proposals by Union Finance Minister, the media industry seemed
distraught that none of the reliefs it has sought have been
considered.
"There is nothing we had hoped for," a source in
the Indian Broadcasting Foundation told indiantelevision.com.
The source pointed out that the Sensex crash pointed to the
sentiments of the corporate sector and the media industry
could not feel otherwise.
Both the major commerce and industry chambers, Federation of
Indian Chambers of Commerce and Industry, as well as the Confederation
of Indian Industry have, meanwhile, said they were disappointed
with the budget.
There were, however, indications, that the industry, especially
MSOs would perhaps try and activate the government to meet
with their demands in the ensuing period of debate on the
budget proposals
One major news channels told this correspondent that the
major thing they had proposed was reduction of customs duty
on STBs and components for producing them indigenously, but
hopes had been dashed.
Said India TV CEO Chinatamani Rao, "What could one react
to? The IBF had on behalf of the broadcasting industry given
several suggestions and nothing has been done on those issues.
There is nothing in the budget for the entartainment or broadcasting
industry. At best, you can say it is a neutral budget."
However, Big 92.7 FM COO Tarun Katial, struck a less strident
note when he said, "Reduction in the customs duty works
in the favor of business houses. The service tax however needs
to reduce… especially since the radio industry is at
its infancy and has great employment and media opportunities
in the semi-urban and rural markets.
"Local retail advertisers are at the bottom of the pyramid
and they should not be subject to service tax, especially
if they have to be enabled to compete with other established
/ larger players. The benefits that the budget brings to the
agricultural sector is very good and with our network spreading
across the country and reaching out to 50,000 villages, it
is sure to be good for business.
"Extending FBT on ESOPs requires some analysis and the
additional 1 per cent cess on all taxes is sure to burn a
hole in some pockets."
Radio Mirchi CEO Prashant Pandey said, "There has been
nothing specific for the radio industry in this budget. So
while it is a growth budget and that is good news for advertising,
that is the only thing which brings cheer. I dont think radio
was looking at anything specific either. We had asked for
a waiver of customs duty in our pre budget memorandum, so
that was expected."
Arvind Mohan, senior executive vice president of WWIL told
indiantelevision.com: "This is a dismal budget. There
is nothing in it for us."
He opined that at best, the marginal reduction of tax burden
on import of digital equipment could be seen as a s sort of
a silver line.
There has been no change in the customs duty for import of
STBs, and the service tax, which had been sought to be done
away with in this budget, has been slightly augmented, from
12.24 to 12.36 per cent, which is detrimental to the growth
of the industry, Mohan felt.
Stressing that he felt that the dividends distribution tax
and the tax on share options for employees would also dampen
industry spirit as a whole, Mohan said, "We shall take
it up with Trai and also with the Indian Media Group, and
lobby with the finance ministry and we hope the government
will heed our demands.
Roop Sharma, president, Indian Cable Operator's Federation,
said: "Chidambaram wants complete digitalisation of cable
TV before the 2010 Commonwealth Games, but what has he done
for that? Nothing. I think they want the small industries
like cable operators to die out, because they have given no
tax holiday for us at all."
Senior Trai officials said that they had sent their proposals
to the finance ministry some 25 days ago, and "by then
the budget procedure might have got a long way through,"
indicating therefore, that they were not happy with what has
been proposed for the sector.
The official said that due to certain reasons, he had not
been able to look at the exact budget proposals, and would
be ready to comment later only.
Most observers, however, felt that there was nothing in this
budget for the media and entertainment industry, but sought
more time for giving more considered opinion.
Trai had strongly proposed that customs duty on import of
STBs and their components be reduced to Zero, and service
tax be waived. It had called for rationalisation of tax structure
to provide for a level playing field for the newspaper and
electronic media, but that has not been reflected in the proposals
by the finance minister.
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