MUMBAI: The Union Budget 2017 provides the much-needed encouragement to digital India and MSE companies. This, in turn, is said to boost more digital transactions and payments which might boost the growth in advertising in the digital space.
The biggest highlight for the advertising agencies was that those with billings of less than Rs 50 crore in FY15-16 would benefit from corporate tax reducing to 25 per cent. This is believed to boost their overall profits and cash flows.
Though, the digital marketing sector was hoping for cuts in service tax on digital advertising and certain clarifications on the soon-to-be-rolled-out GST, the industry is positive about the budget’ implementation. In the design sector, the budget has brought several new opportunities in the areas of user interface and user experience.
Here’s what the advertising, marketing, communications and design agencies have to say about the budget:
DAN Performance Group CEO Vivek Bhargava said, “It’s a good budget overall and an extremely positive one for the digital industry. The strong focus on promoting a digital economy through various initiatives on the digital payments front will give a great impetus to the digital revolution that the country is currently undergoing. We are witnessing a significant increase in digital transactions owing to the cashless movement already, which is a huge indication of the times to come – largely in the benefit of the common man. It’s encouraging to see the government introduce movements like ‘Digi-gaav’ and others which will take digital technology to the rural areas where most of the country’s population is actually based. This aggressive digital push is sure to contribute substantially in making India one of the fastest growing economies in 2017.”
FCB India group chairman and CEO Rohit Ohri asserted, “The focus on reviving rural consumption, digital India and SWAYAM were the highlights of Budget 2017 for me. The high impetus on digitization, will pave the way for empowerment of the common man. And will open doors to a massive opportunity, untapped as of now, in the digital space. Overall, a progressive budget.”
VML SEA & India CEO Tripti Lochan added, “The government has created a budget with prominence on digital. Demonetization’s longer term benefits will percolate – as the first step towards a cashless economy. But more importantly, there are incentives across all areas of the budget pushing digital.”
Salt Brand Solutions founder Mahesh Chauhan said, "Tax reduction should boost consumption and more than offset the decline post demonetization. ??? It ?????? should boost the real estate sector with tenure reduction for capital gains. ???As the focus continuous on infrastructure good for long term prospects.???"???
MindShift Interactive CEO Zafar Rais asserted, “The Union Budget 2017-2018 proposes reforms in tax rules with a positive impact on the corporate tax structure by providing a welcoming tax relief to medium and small business after the affects of demonetisation. The initiatives to encourage digital transactions have been maintained with an outlook on a digitized economy. Overall the budget looks progressive though we are awaiting more clarifications on the GST implementation.”
Pulp Strategy Communications founder and MD Ambika Sharma said, “The latest budget announcement holds great promise. I am particularly enthused by the hike in capital allocation for women skill development initiatives to INR 1.84 lakh crore for the 2017-18 fiscal. This move will empower women across the country and help them in becoming active contributors in the country’s growth. The allocation of INR 10,000 crore for the BharatNet project is also promising, as it will bring high-speed internet connectivity to rural citizens in nearly 150,000 gram panchayats through Wi-Fi hotspots. With nearly 70% of the country’s population living in rural and semi-urban geographies, the move will give the vision of a ‘Digital India’ a big boost. On the business side, the reduction of corporate tax for MSMEs with annual turnover up to INR 50 crore to 25 per cent is a very welcome move which is expected to benefit nearly 96% businesses in the industry. Given that corporate tax is one of the major expenses for the country’s MSMEs, the cut in tax rates will promote greater growth within the sector and will allow Indian businesses to become more competitive globally. Increasing the period for profit-linked deductions to three years out of seven years as against five years is also extremely positive news for the country’s entrepreneurial landscape. Since start-ups often do not generate any profits for the first few years of their operations, increasing the consideration period to seven years will benefit more start-ups and promote entrepreneurship across the country. The setting up of Payment Regulatory Board by RBI to replace BPSS (Board for Regulation and Supervision of Payment and Settlement Systems) as the regulator of electronic payments is also a promising development in the quest to become a less-cash and digital-first economy.”
Mogae Media chairman Sandeep Goyal voiced, “It is a growth oriented budget with special emphasis on youth and rural, and large provisions for skill development and alleviating unemployment. Combined with the digital thrust, this should help brands focussed on younger audiences especially outside cities. Two-wheelers, telecom, handsets, 'get-ahead' education products, grooming and accessories (look-good) products should all receive an advertising fillip. Digitisation of payments and purchase should help enhance the geographies of e-commerce making more brands more easily available to larger numbers of newer customers. This is a new opportunity for advertising and a new challenge for targeting right media to right customers through right apertures at the right time.”
Knowlarity Communciations CEO and founder Ambarish Gupta added, “The Budget for FY 2017-18 has been declared and though it does not have any major reforms as pundits claimed it would, post demonetization, it has tried to incorporate all essential elements that were of prime concern. The flailing agricultural sector has received a big boost as a sum of Rs. 10 lakh crores has been allocated as credit to the farmers, with an interest free period of 60 days. In order to deal with the uncertainties of monsoon, a dedicated micro-irrigation fund will be established under the aegis of NABARD with Rs. 5000 crores as initial corpus.A number of tax SOPs have been directed towards aiding the MSME sector which was the worst hit during demonetization. For companies with an annual turnover of less than Rs 50 crores, corporate tax has been reduced from 30% to 25%. The budget also directed a sum of Rs 24,000 crores for the growth of the MSME sector. For start-ups reeling under high taxes, the Finance Minister has declared that they would have to pay taxes only for three out of seven years-which was earlier just five- that too only if they make profits.With elections in three states coming up, the budget was expected to be a neutral one. It however, has tried to focus on certain areas which needed immediate effect, without attempting any extravagant measures.
Factral Ink Design Studio CEO and creative director Tanay Kumar said, “The Union Budget 2017 gives a huge impetus to Digital India. Incentives like no service tax on digital rail bookings, digital pension distribution system for retired defense personnel for easier access to their funds, the DigiGaon initiative to provide tele-medicine, education, and skills, through digital technology and two new schemes to promote use of BHIM should drive digital traffic. Along with this steps to strengthen connectivity with high-speed broadband on OFC will be available in more than 150,000 gram panchayats, with hotspots and access to digital services at low tariffs, and the emphasis on cyber security with computer emergency response team to be established for the financial sector to work in close coordination with financial sector regulators and other stakeholders, with boost confidence in the people to use digital platforms. As a Digital Design company we are really excited on the opportunities that this budget has created in developing some path breaking work in the areas of user interface and user experience."
The Minimalist co-founder Chirag Gander said, “This is a welcome budget by our Finance Minister. The advertising industry, which saw a downfall and was hit due to demonetization, has now got relief on many counts. Increased focus on ‘Digital India’ by the Government will encourage the setting up of new companies, eventually bringing in more business for the advertising and marketing sector. Besides, with the Government’s ‘Make In India’ initiative there will be greater focus on the Indian market and consumer, thereby creating a sort of increased competition among the players in the market to occupy the top spot and reach out to the end buyer. In such a scenario, the reduction in Corporate tax by the Government will give Companies and Brands more power to spend on advertising and marketing activities. Also, the early release of the budget will help Companies plan their marketing and advertising budgets well in advance for this."