Budget 2021 draws mixed response from digital M&E players

While there not much in the Budget for the media & entertainment (M&E) sector, the digital players of the M&E ecosystem have welcomed the Budget for being forward-looking with a thrust on economic recovery.

BookMyShow Founder & CEO Ashish Hemrajani said Budget 2021 puts the thrust on infrastructure, healthcare, and capital expenditure to stimulate growth and accelerate recovery. "The government’s continued impetus to a digital India by way of support to start-ups and internet businesses through the ₹1,500-crore fund to boost digital payments is a step in the right direction towards creating value through entrepreneurship for the economy."

He also lauded the government’s efforts to iron out compliance issues by decreasing the time-limit for re-opening of income tax proceedings to three years from the present six years as also increased threshold for tax audits supported by greater technology deployment to streamline the process is well appreciated. Further, he also welcomed the government’s commitment to supporting the common man with no increase in taxes or capital gains tax, or levy of COVID cess.

Hemrajani pointed out that the Budget has failed to address the relief measures demanded by the sector. "The entertainment ecosystem, the world over, remains the keystone for travel, tourism and hospitality industries which are growth engines for any economy and have been the worst-hit through the pandemic. Budget 2021 did not address the long-pending relief measures for the media and entertainment industry by way of easing infrastructure roadblocks and rationalising the extremely high GST rates on live entertainment with that levied on cinema."

Pocket Aces VP of Finance and Operations Kunal Lakhara praised the Budget for addressing key issues like fiscal deficit and capital expenditure. For him, the one-year tax holiday for start-ups is also a welcome move.

“The Union Budget 2021-2022's revised fiscal deficit estimate for FY21 which is pegged at 9.5% of GDP seems promising and has taken on a realistic approach that is focused on spends which is much needed to revive the economy. The tax holiday given to start-ups for an additional one year brings relief to enabling the sector to sustain and grow, as we recover from the pandemic. Furthermore, the move to encourage one-person companies without any restrictions is a step in the right direction. This will go a long way in encouraging more people to come forward to set up innovative businesses that solve the challenge of the day and grow the high-potential start-up ecosystem within the country,” Lakhara stated.

Verizon Media Country Manager, India Nikhil Rungta feels that Budget 2021 might not be radical but it does make the right moves to kickstart business growth. “This is a 'get well' Budget with an expansionary outlook and focused on growth. Given the times, it might not be a radical Budget, but it is practical and thoughtful, which will propel consumption and growth of the business. This Budget has also rightly signalled the need for greater inclusion in India's workforce. Women being allowed to work in all sectors and in night shifts with adequate protection, and social security benefits extended to gig workers will provide an impetus for women to step up their contribution towards Aatmanirbhar Bharat.”

According to Gonuts Co-Founder Joji George, the Budget though positive, left us wanting some more from a start-up and MSMEs perspective. That said, he added that the Budget did reflect the Indian government’s commitment to boost the Indian start-up ecosystem.

"A boost from the Budget for start-ups is important as it carves the next phase for the start-up ecosystem post the pandemic. The government’s decision to bring in institutional investors to invest in start-ups is a positive move and will help encourage more investment into the start-up community.  Of course, the start-up community needs to see and understand the fine print.

"FM’s announcement on registration of one-person firms with no limit to paid-up capital will boost the start-up ecosystem. That helps small entrepreneurs to take the leap. The government has doubled its expenditure allocation towards micro small and medium enterprises to Rs 15,700 crore in FY22. This is an excellent move for companies like us that work with a large number of MSMEs.

"Another boost offered by the government is an extension of tax holiday for start-ups by one more year. This will help get start-ups on their feet as they grapple with cash flow and investment. In the near future, we would want the FM to give a concrete plan on ESOP taxation and hope that the initial deliberation of a 5-year term to pay tax on ESOP is implemented and there is a rationalisation."

Mobile Premier League (MPL) Co-founder and CEO Sai Srinivas said that the government’s Budget announcement has been extremely encouraging for the start-up ecosystem in India. The extended exemption on capital gains for investments will definitely make more funds available for budding entrepreneurs and growing organizations alike, he added.

Srinivas noted that the digital payments infrastructure has played a very important role in the growth of the mobile gaming industry. "It is very encouraging to see the government’s efforts to strengthen digital payments through incentivization. The Rs 1,500 crore boost will further support migration of more people towards digital payments and will have a positive impact on the mobile skill gaming industry."

Further, the incentivising of one-person companies is especially heartening as it promotes the development of more game creators that will help in strengthening the gaming industry in India. "The move has also allowed conversion of one-person companies to any other kind, reducing residency limit from 182 days to 120 days."

Bobble AI founder and CEO Ankit Prasad said that key announcements such as extending tax holiday and the capital gains tax exemption till March 31st, 2022, revision of the definition of small companies under Companies Act 2013 along with the decision to incentivise incorporation of one-person companies, would help them grow without any restriction on paid-up capital or turnover and to convert into any other type of company at any time – are a clear reflection of the government’s commitment to resurrect this sector and provide the much-needed support.

He further stated that the government's move to launch data analytics, artificial intelligence, and machine learning-driven MCA21 Version 3.0 is praiseworthy. The e-scrutiny, e-adjudication, e-consultation, and compliance management should also make our life much easier.

Hansa Research Group CEO Praveen Nijhara is elated about the fact that the government has allocated Rs. 3,768 crore for the first-ever digital-census. "As a research & insights firm, we are very happy with the Rs. 3,768 cr allocation made for the census. The fact that this will be India's first digital census is only the icing on the cake and we very much look forward to seeing it happen."

Expanding further on the census, So Cheers Co-founder, Director Siddharth Devnani said that the data which will be made public after the census would be instrumental in understanding the demographics of the country. "The data mining capabilities have evolved manifold since the last census. This has the potential to lead to a lot of new insights."

Monk Entertainment Partner & COO Jalak Rawal pointed out that the Budget has left much to be desired for the start-up sector. "As far as the start-up industry is concerned, we welcome the policies introduced by FM but they are not path-breaking."

Pocket52 Founder and CEO Nitesh Salvi averred that the Indian government launched the start-up India Initiative back in the year 2016 with the idea to increase wealth and employability. Therefore, for the old start-ups, another year of tax holiday has no importance. "As they would be well-funded by now and then paying tax would not be a challenge anymore. And the ones which are not well-funded have crossed the time-limit of tax holiday. For the new and budding start-ups, it can definitely act as a confidence-boosting attribute but as a good entrepreneur and citizen, I would still want to focus on reducing operational costs and enhancing profits rather than saving taxes."