Budget 2018-19: Digital players look for more impetus to Digital India drive
The digital industry is looking forward to the Union Budget for 2018-19 with great expectations. Digital players are hopeful of greater impetus by the Government to grow the Digital India ecosystem. They are also looking forward for more sops to strengthen rural India and bring it under the ambit of Digital India.
I expect the Budget to be a populist one, given the impending elections next year. My hope for the digital industry is that we will see some initiative by the government to further promote Digital India. Clearly, one way to do that is to ensure more advertisers spend on digital media so that more digital companies can sustain a business model via advertising. I feel between equalisation levies and GST, the industry has no edge over other mediums and given that advertising growth is necessary for digital solutions to grow, I hope there will be a re-look at these levies and taxes. Beyond this, I am hoping that the Government will bring out schemes in order to bring rural India as part of Digital India, thereby increasing the overall Internet penetration in the country.
In this Budget, we look forward to the Government focusing on the upliftment of the rural economy and job creation. 49 per cent of India’s population is engaged in rural economy. More money in their hands will lead to a rebalancing of media spends by corporates that provide goods and services to the rural market. This will be a positive for the advertising industry.
Since the Government is focused on augmenting digital infrastructure and achieve its vision of Digital India, the expectation would be to see larger allocation for development of digital assets in the country. While GST has been a good move, 18 per cent is levied on digital media, to grow the sector this levy needs to come down. Lower levies will give not only the sector, but the larger goal of Digital India a much needed impetus.
With the Government heavily promoting its Digital India initiative, I expect it to announce measures to strengthen our country’s digital infrastructure. A possible way to do this would be to subsidise data costs; this will certainly help promote its usage in Tier 2 and 3 cities, thereby increasing overall internet penetration in the country. Increased Internet availability, accompanied by the shift to online transactions, will spark a boom in the digital economy; it will also give advertisers the necessary boost to increase their focus on using the digital medium efficiently for communication. Additionally, the simplification of GST will enhance the ease of doing business and spur growth in the digital sector. India is already one of the fastest-growing advertising markets globally. And, with the much-needed policy reforms, the digital communications industry can become a responsible contributor to India’s growth story.
The announcement of Union Budget is just around the corner with discussions and debates being conducted around it. There is hush-hush regarding the assumptions when everyone is expecting a positive release. As far as digital is concerned, besides the allocation of budgets on Digital Infra Development, there is a need to initiate a few reforms. Digital is the fastest growing sector of India and should be highly benefitted from the Union Budget.
As per my understanding, budgets should be allocated to PSUs for investing in digital marketing. This will lead to a win-win situation as for the organisation the digital mediums will help gain recognition and support. While the digital agencies will spread awareness and educate the audience about the benefits of the organisation. Even the digital organisations paying taxes dutifully should be recognised well and given the right opportunities to flourish.
Even on a personal level, the entrepreneurs who are platinum taxpayers should be given certain advantages as a reward for their contribution towards the nation. Any individual paying heavy taxes on time should be entitled to such benefits which could be in the form of a card similar to the other identity cards we have. This will not only be a welcomed move, but it will also ignite the zeal among the others to be a part of that category, thereby benefitting the country.
However, what the Budget is going to be will be interesting to witness and I hope for some reforms that help the digital sector in various ways.
The only expectation from the Budget is to initiate policies/ programmes to restart the investment cycle in businesses and make affordable capital available to agencies. The country needs to see real and organic private sector growth, not only that infused by government spending. When businesses thrive, jobs get created. When the Government spends, taxes get raised.
The payment industry is looking at innovative ways to further digital transactions in the country. Companies providing employee benefit solutions are also increasingly opting for cashless solutions. As a result, more and more people are now using Digital Cards to avail benefits such as Medical, Meals, Gifts, Fuel, etc., in the process replacing cash with digital transactions in their daily lives.
We hope the Finance Ministry would enhance the allowable tax-free value of Employee Benefits under the Income Tax Perquisite Rules; since it’s been a long time since the last revision. We also recommend that they link it to a Consumer Price Index to keep it relevant year after year. This would give a boost to the digital and cashless drive and have a multiplier effect on the economy.
The year 2017 was the year of cashless. With the readiness of IndiaStack, 2018 can be a year of paperless access to financial products. Most recently, the RBI household committee report pointed out the importance of seamless access, and said that household income can increase by 10 per cent if consumers access the right financial products. Paperless financial products have the ability to reach a huge cross-section of the population through just the mobile phone and the Internet, democratising finance in a big way.
This Budget, we hope to see the Government of India encourage paperless access to financial products through an increase in monetary limit for paperless e-KYC via OTP that will remove the need to collect physical copy of PAN/ Passport and enable 100 per cent paperless onboarding of accounts for all financial products through adoption of e-Sign, e-NACH and DigiLocker technologies.
Usage of Digital Signatures: The year 2017 brought a huge boost to fintech firms at a time when the market was recuperating fast from demonetisation gloom. We expect the Budget 2018 to provide further impetus to this growth by giving a push to encourage the usage of digital or e-signatures for document authentication and to create a complete paperless economy.
Increased adoption of Fintech Products & Services: The adoption of fintech products and services for availing credits as well as increasing savings are set to grow 3 to 4 times as compared to last year. People are now getting receptive to the digital world with advanced products and services provided by the NBFCs and banks. We expect the Budget 2018 to build a stronger mechanism with a major focus on driving the growth of MSME sector.