The Indian media and entertainment (M&E) industry grew by 8.1 percent in 2023 to reach Rs 2.3 trillion, and is expected to grow to Rs 3.08 trillion by 2026.
This burgeoning industry is on the lookout for favorable policy and tax announcements in the upcoming union budget under Modi 3.0 to continue this growth momentum. For years, the industry has felt left out in the interim/union budgets presented.
The growth of the media and entertainment industry relies on consumers’ ability to spend on leisure and entertainment. To increase disposable income, focusing on boosting employment through nationwide programs and reducing the tax burden to enhance discretionary spending are essential, said Hiren Gada, WTD & CEO, Shemaroo Entertainment.
Anticipatings a budget that not only sustains the industry growth but propels it towards new horizons, he said, “The allocation of funds and providing financial incentives to stimulate research and development in technology, especially artificial intelligence, for the media and entertainment sector will be beneficial. This could include grants, tax credits, and subsidies for businesses engaged in innovative tech solutions,” he said.
What the GoI proposes for building digital infrastructure and literacy and the rapid advancement and adoption of emerging technologies like AI, AR, and VR which have the potential of providing a transformative landscape for advertisers will provide the necessary impetus to the advertising industry, said Vinay Hegde, CEO – Investments, Madison Media.
“Other expectations are in terms of reduction of import duty on newsprint, revision in DAVP rates by the print medium, and TRAI’s recommendations with regards to license fees to amplify the impact of radio, which despite its last mile reach strength suffers from lack of attention from GoI,” he added.
Further, simplification of regulatory and compliance requirements for advertising agencies could reduce administrative burdens and encourage business growth. Simplifying GST processes and reducing rates for advertising services to lower the cost of advertising campaigns, said Yasin Hamidani of Media Care Brand Solutions.
In a nutshell, the industry believes that the upcoming Union Budget under Modi 3.0 presents a crucial opportunity to significantly advance the advertising and media sector in India.
Focus on tech advancements and smaller enterprises to fuel adex
Experts are hopeful that the budget will foster a conducive environment for technological innovation. The previous budgets have shown a commitment to infrastructure development, with a focus on creating a $5 trillion economy.
Pankaj Arora, Co-founder, Whilter ai, emphasised the need for targeted support for start-ups and ethical guidelines for generative AI, in the budget.
“The government should simplify regulatory processes, provide tax incentives, and ensure better access to funding for early-stage ventures. Additionally, the rapid advancement of generative AI necessitates clear and enforceable ethical guidelines to ensure responsible development and deployment,” he said.
He urged the government to invest in AI research and development, skill development programs, and create public-private partnerships to foster innovation while safeguarding ethical standards.
Stakeholders expect the budget to offer financial support and subsidies for small and medium-sized enterprises (SMEs) to adopt digital marketing solutions, ensuring they can compete with larger players.
Further, removing the debated ‘Angel Tax’ will significantly propel India’s ascent as a global hub of innovation and technology.
Fueling creator’s economy
Previous budgets have focused on digital literacy and expanding internet access, with the BharatNet project aiming to connect 2.5 lakh gram panchayats by optical fiber. Expanding internet infrastructure and promoting digital literacy, especially in rural areas, will further enable more individuals to participate in the digital economy.
These measures will drive growth in the influencer marketing industry and contribute to broader economic development, said Gautam Madhavan, Founder and CEO, Mad Influence.
He estimates the influencer marketing industry in India to be worth Rs 2,344 crore as of today and is projected to grow significantly, reaching Rs 3,375 crore by 2026.
“While in the previous budgets, the government recognised the significant impact of digital platforms and content creation, more focused initiatives are needed to address the unique challenges faced by influencers and marketers alike,” said Vaibhav Gupta, Co-founder and CPO, KlugKlug.
Hamidani expects increased funding for local content creators to promote homegrown talent and support the production of high-quality content and introducing tax relief for companies investing in local content creation to encourage the development of culturally relevant advertising.