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Interim Budget 2019: Interim Budget 2019: What does the Entertainment Industry expect this year?

FPJ Web Desk

With just a day left for the Finance Ministry of India to table its interim budget, we list down what Entertainment Industry can expect this year. Interim finance minister Piyush Goyal will be presenting the budget on February 1, as Arun Jaitley is in the US on medical leave.

With every big and small movies being leaked online, resulting in great loses to movie makers and theatre owners, the major concern currently for the Entertainment Industry is piracy.

Not just that, the government has been losing a good share of taxes on the ticket sales. Previously the allocation of Rs 110 crore was made towards cyber security. However, the share towards preventing piracy out of the same has been meagre. It would be interesting to see what amount the Government would allocate towards these projects for improving cyber security.

Consumers have already heaved a sigh of relief as the Government recently reduced GST from 28% to 18% for 66 items including DTH Set Top Box and Cables, movie tickets, mobiles, TV, digital cameras, and video camera recorders sets to name a few. This further indicates that it may bring down prices of white goods such as cameras.

Check out an overview of what 2019 Interim budget might have store in for the Entertainment Industry.

Cinema

Movie Tickets

Pic Courtesy: Pixabay

Current GST on Movie Tickets: 18%

                                 Expectation: 12%

According to KPMG report, Film Industry from FY 2017 to FY 2018 have seen growth of 9.5%. Similarly the Domestic theatrical, Cable and Satellites rights and overseas theatrical, of Indian films saw a growth of 7.3%, 3.5% and 20.6% respectively from the FY 17 to FY 18.

Cinema goers are in a better place as Government has already reduced the GST on movie tickets. Cinema tickets up to Rs 100 which were under 18% GST slab were brought down to 12%, while tickets above Rs 100 which were under 28% slab were brought down to 18%.

Still, hopes are high that the GST on movie tickets can be further reduced from 18% to 12%.

Piracy concerns

One of the major concerns for Entertainment Industry currently is piracy. With every other big or small films being leaked online within a day of its release, Entertainment Industry has occurred huge losses.

In the 2018 budget, Government set aside Rs 110 crore for cyber security projects, including the National Cyber Security Co-ordination Centre and others. However, it failed to make any significant impact as the proportion of amount that could be attributed to prevent piracy has been meagre.

It goes without any saying that Entertainment Industry would be pinning their hopes high on the 2019 budget to allocate sufficient amount to stop piracy, and reap higher revenues from the films.

Television

Pic Courtesy: Pixabay

According to the KPMG report, Television Industry has shown a growth of 9.5% from FY17 to FY18. While the advertising revenue of Television has seen a growth of 10.3%, the distribution revenue has seen a growth of 9.1% from FY 17 to FY 18.

According to the Manufacturing sector, the growth would have been more if the import duty charges on the Television parts would have been less, as it would have resulted a deduction in the prices of TV sets. This eventually would have given a boost to the number of people from the rural sector for purchasing TV sets.

At the 31st Goods and Service Tax (GST) council meeting, GST rates on several items were brought down from the top 28 per cent slab to 18 per cent which includes monitors and television up to screen size of 32 inches. According to Business Today, Budget 2019 may tweak customs duty on TV sets to give a further boost to the Make in India initiative.

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Digital

Pic Courtesy: Pixabay

The way consumers are spending more and more time on the Digital sector, it would not be wrong to say that the Digital world will soon overtake or at least will be on par with Film and TV sector.

According to KMPG report, Digital access and consumption has seen a rapid growth over the last 24 months following the rollout of 4G aided by falling data cost and rapid growth in smartphone penetration.

Government should incentivise the digital content aggregators so as to create original content. The popularity has been rising and this could act as a substantial source of revenue both for the industry and the government. Also, the chances of piracy would be lower as the cyber security and safeguards would be the prime responsibility of the content delivery channels.

Also, aware of the rapid popularity of Digital world, the Government in the 2018 allocated RS 10,000 crore for 5 lakh Wi-Fi hot spots to provide broadband access to 5 crore rural citizens under Bharat Net Program. However the Government has not been successful enough to implement them. Whether the Government will mention about the 5 lakh Wi-Fi hots pots in the Union budget of 2019, is something everyone will be looking forward to.

 Radio

Pic Courtesy: Pixabay

FDI policies, tax and duties rationalization are some of the areas which Radio Industry is hoping to get place in the Union Budget. The current Import duties on Radio equipment is 30%, a deduction in the GST will help to lower the cost of setup apex. The GST for radio advertising is at 18 per cent, a 5% slab is what Radio Industry is expecting.

Nisha Narayanan, COO, RED FM while talking to Afaqs, said “Radio has entered into additional tier 2-3 markets as part of phase 3 expansions and for the industry to look at additional cities for launching newer stations, the setup apex cost is something which needs to be lowered. This is only possible if the budget rationalises the import duties on radio equipment which is currently around 30 per cent. Currently, the FDI stands at 49 per cent for the radio industry. Liberalisation of the same will also majorly help in private FM stations to reach the current media-dark cities in India.”