Budget 2017: Ad industry welcomes leg-up to the digital sector

Ashish Bhasin, Chairman & CEO South Asia, Dentsu Aegis Network:

“The Budget has some good growth oriented features, which should help the overall economic growth. Whenever the economy grows by 1 per cent point, advertising grows by 1.5-2 per cent points and, therefore, this should benefit the advertising industry in the long run. There are several steps to encourage digitisation. This is the right direction and eventually this will also benefit the advertising industry. The fact that the Service Tax was not raised is a relief and the Finance Minister has taken into account the sufferings caused by temporary setbacks due to demonetisation and that is a welcome step. Personal taxation has shown some marginal relief, which should put some money into the pockets of people and spur the economy, though I wish some more had been done on that account. There was an expectation for corporate taxation to be reduced. Unfortunately, particularly for mid to large organised sector that has not happened, but hopefully it will happen in the near future. Overall, the Budget is better than what we had anticipated for the advertising & media industry, in my view.” 

Vivek Bhargava, CEO, DAN Performance Group:

“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.” 

Rohit Ohri, Group Chairman and CEO, FCB India:

“The focus on reviving rural consumption, digital India and SWAYAM were the highlights of Budget 2017 for me. The high impetus on digitisation 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.” 

Zafar Rais, CEO, MindShift Interactive:

“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 digitised economy. Overall, the budget looks progressive, though we are awaiting more clarifications on the GST implementation.” 

Venugopal Ganganna, CEO, Langoor:

“There are a few positives for the advertising world. The impact won’t be an avalanche increase in spend in advertising rupees, but rather, more like drops filling up a bucket. Firstly, the strong push around digital transactions will result in greater digital spends. That should see some direct increase in digital marketing spends in particular. The reduction in tax rates will have some positives too. For smaller businesses, they will have slightly more room to invest within their business. That should see an increase in their marketing spends. News around making credit more available through banks will see businesses be more aggressive around building their brand. That increase in liquidity, especially for smaller businesses will directly impact advertising spend. The increased infrastructure spend will infuse some capital in the economy. Consumption should also increase given the reduction in tax rates at lower income levels. Both of these will see revenue growth for consumer brands, which will directly increase their budgets for advertising. We haven’t spotted any major negatives yet for this sector.” 

Tripti Lochan, CEO, VML SEA & India:

“The Government has created a budget with prominence on digital. Demonetisation’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.” 

Ambika Sharma, Founder & MD, Pulp Strategy Communications:

“The latest budget announcement holds great promise. I am particularly enthused by the hike in capital allocation for women skill development initiatives to Rs 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 Rs 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 per cent 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 Rs 50 crore to 25 per cent is a very welcome move, which is expected to benefit nearly 96 per cent 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.” 

Ashish Shah, CEO and Founder, Vertoz:

“The Budget presented by the Finance Minister is encouraging for different strata of society. From agriculture and rural economy to digital initiatives and from FDI to relaxation in tax slab in the entry category, the Finance Minister had something for all. 

As a tech-based advertising firm, Vertoz welcomes these measures announced today to promote the digital sector. From infra layout to digital transactions and from introduction of Aadhaar Pay to cyber security, Budget 2017 is certainly a booster for the digital economy.”