A Growth-Oriented Union Budget 2022?

With yet another pandemic struck year, reports suggest this year's Union Budget will present a roadmap for economic recovery by ensuring tax and policy stability. In all probability, the focal light will be on issues of demand generation, job creation, and sustaining the economy on an 8 per cent plus growth path. Digital adoption and transformation will also remain a key point of debate.

We speak to leaders across the A&M industry who deliberate on some big questions- Will the budget provide relief to boost demand? Will it augment the already accelerated digital demand? Will it ease business for MSMEs? Will it invite better internet infrastructure? What could be the possible license fee waivers? Will the startup sector be able to thrive further?

Dinesh Chhabra, Chief Executive Officer, Usha International

The expectation for this year’s Union Budget is that it sets the stage for economic revival, especially given the advent of the third wave.

The past two years have seen the world undergo a paradigm shift as COVID-19 ushered into our lives a black swan event of a magnitude never witnessed before. Despite the highs and lows, the consumer durables industry is one that has managed to bounce back fairly well and continues to grow steadily.

Having said that, the abnormal surge in the price of raw materials, which started increasing over a year ago, has cast a shadow on revenue forecasts and continues to pose a grave challenge for companies. In addition, supply-chain logistics issues are also adding to the burden for businesses. For brands uncompromising in their quality business becomes unviable, unless the part of the price rise is passed on to the consumer. This rise in prices is impacting consumer spending, adversely affecting the recovery and growth of our economy. The need of the hour is for the government to intervene and put in place some policies in this year’s Union Budget, that will facilitate rationalisation of the costs of raw materials, fuel, and help smoothen the supply chain. 

Further, as digital adoption and transformation accelerate, there is a need for increased allocation to improve internet infrastructure and connectivity to bridge the rural-urban divide across geographies.

We are hopeful that the upcoming Union Budget will be aimed at accelerating economic reforms, promoting entrepreneurship, and providing stimulus packages that will help fuel consumer demand across sectors.”

Shams Jasani, CEO, Wunderman Thompson South Asia 

COVID-19 has defined a “new normal” for businesses and has altered business dynamics and consumer behaviour forever. There has been an overall increase in tech spending, and digital will continue to drive growth for the industry. With the uptick in e-commerce activities, most brands are dependent on technology led solutions to transform their businesses.

We are hopeful that this year’s union budget will be a growth oriented one, aimed at providing tax relief to boost consumer demand, which in turn can propel brands to increase spending across media in the coming year. Our expectations from the upcoming budget are ease of doing business for MSMes and startups, scaling investment in digitisation and fostering better internet connectivity infrastructure to ensure last-mile connectivity with a specific focus on rural areas that will help drive growth.

We hope that this year’s budget will continue to focus on business recovery and sustainable growth with necessary budgetary allocations and tax incentives that will give brands that much needed impetus to increase marketing spends for their businesses.

Prashant Panday, MD & CEO, ENIL (Mirchi)

The most important thing that we should look for in the budget is whether it brings back confidence and improves the sentiment or not. Through a range of measures – offering direct tax incentives, reducing taxes across the board, liberalising laws that constrain business growth, improving ease of doing business, privatising strategically unimportant PSEs and others – the government can boost growth, increase jobs, and build confidence among the general populace.

The Media & Advertising sector is affected hugely by consumer demand in the economy. Right now, demand is weak, and it is affecting growth. The government must provide fiscal incentives to boost consumer demand. As we get out of the pandemic, there is a need to create consumer demand by rationalising GST and fuel taxes, by creating a mechanism for cash transfer to the urban poor and by supporting job enhancing sectors like tourism, hospitality, retail, construction, and MSMEs in all sectors. In addition to this, certain segments of media, like FM radio, newspapers, and OOH, which have been hit the worst by the pandemic, need special fiscal incentives and support to help them recover. FM radio, in particular, needs license fee waivers, an extension of the license period, and higher spending from the government on advertising.  

Manas Gulati, Co-founder and CEO, #arm worldwide 

The economy has shown great resurgence post the initial impact of covid among different sectors like Digital Payments, Finance, Gaming, Healthcare, IT, Ecommerce (D2C), Service Industry . As quoted by economists, the nominal GDP is pegged to grow at 12.8% in the FY23. Whenever the economy does well, it has a direct impact on the advertising and marketing industry. Last year's budget emphasised the digital economy, digital payments (specially allocated INR 1500 Cr), MSME tax benefits greatly contributed to the overall growth in these sectors. The upcoming budget should consolidate the earlier regulations on sectors that are booming and will contribute to the Indian economy. With higher disposable income in the hands of consumers, the companies would benefit which in turn will highly impact the growth of the advertising and marketing industry.

Himanshu Arya, Founder and CEO, Grapes

The Indian advertising industry is unfolding at a tremendous pace. It is projected to be the second-fastest-growing advertising market in the Asia-Pacific region. The Indian advertising industry is poised to reach up to 700 billion rupees by 2022 from 564 billion rupees in 2020. Despite the pandemic, the industry has witnessed substantial growth, and this all happened on the back of digitalization. A&M advertising has fairly contributed to the economy and is on an evolving stage due to the rapid expansion in digital media.

With union budget around the corner, I think it's time the advertising industry should get its due share. The government should strive and encourage innovation and entrepreneurship in the digital media and the ad-tech sector. India has the brightest and sharpest young minds. We should create an atmosphere that is more conducive for the blooming of start-ups, and at the same time, incentivise investments and funding. The government should bring some stimulus packages and formulate policies focusing on digital infrastructure that bolsters the advertising industry. I hope that the forthcoming budget will only accelerate the wheel of the Indian economy.

Ajoy Thomas, VP & Business Head, TeamLease Services

The e-commerce industry in India has managed to gain substantial growth owing to a rapid increase in internet user penetration, and greater demand for easy access to goods & services among consumers from all walks of life. The possibilities are endless when it comes to e-commerce. Looking at the increase in online shopping and payment gateways. The e-commerce sector should be looking for an impetus to the digitisation and incentivising digital transactions in the upcoming Union Budget.

I also hope that the government cuts the corporate tax rate across the board to spur growth. To amplify the Make in India initiative now is the time for the government to encourage product companies by introducing incentives that help them become globally competitive and take product innovation to the next level

In the last year, the retail sector has shown several signs of recovery and is aiming for a complete revival on all metrics, this is driven by the rising demand from consumers. Experts believe that the increasing purchasing power has led to growing demand. the government ought to take actions, bring measures or programs for the sector that may further impact the growth in the consumption, or at least not let the consumption go down.

The Union Budget should cover certain benefits for startups, such as reduced taxes for companies with a turnover less than INR 10 Crores, and complete exemption from taxes for a duration of 3 years and on profits earned during the first 5 years, the budget should be benefitting the overall startup ecosystem. Going by this fact, I am expecting better tax benefits for startups and SMEs that can further aid the growth.

The much-awaited National Logistics Policy (India ranked 44 with a score of 3.18 in World Bank’s Logistics Performance Index Global Rankings 2018) with a multimodal and tech-enabled approach as the logistics ecosystem is linked to $215 billion and is expected to grow with a CAGR of 10.5% by 2025. The proposed NLP must have room for PPP models for faster optimisation of logistics and warehousing networks and the government must preserve the autonomy and independence of the private sector."

Gautam Madhavan, CEO, Mad Influence

A&Ms are one of the fast-growing sectors in the current scenario. The government should take initiatives to provide support in form of tax waivers and relaxations to the companies falling under this category. The idea of giving more credits and upfront capital loans at lower interest rates could provide the impetus for the start-ups to grow.

As marketers, our expectations from the government are to reduce taxes on digital spends done by the companies in order to make smooth and steep growth in the digital world. The marketing sector is liable to contribute more to the economy provided that they are given fair chances of involvement which is only possible by the attractive and aggressive norms of taxes

Shalu Jha, Co-founder, PRandit Solution

At a time when the Covid-19 threat is still looming large on the Indian economy, the upcoming Union Budget should focus on enabling collective economic growth and supportive aid for various industry sectors, including the services sector and the media sector. At the same time, I would also like to see a focused push and incentivisation for digital media platforms and startups in the media and communications industry in order to allow them to prosper. Especially given that the accelerated adoption of digital and social media networks has now given more power in the hands of the nation's consumers, some stimulus packages and futuristic policy moves focusing on digital infrastructure building and media-tech will be furthermore welcome and encouraging.

Deep Mehta, Co-Founder, DigiChefs
Over the last few years, the government has given a special focus to its Digital India, Make in India, and Startup India initiatives. This has definitely given a huge boost of confidence to young startup founders along with creators to drive the Indian economy forward by building great products and businesses. As a marketer, I expect that the government strengthens these 3 pillars further by giving tax rebates, especially to small and medium-sized businesses, so they can spend more on growing themselves. As these businesses grow, so will consumerism, and so will the country’s economy. The liability and processes of filing taxes could eat up an awful lot of time and effort for young founders and this should necessarily be simplified and eased out.

Moreover, the idea of Make in India should be transformed to encourage Indian brands to go truly global. This impetus can be given by providing necessary modifications in our policies and subsidies, to encourage exports of products and services. The nation has definitely a huge potential to make a global impact in the years to come and with government aid, it can happen much sooner. 

Infrastructure, Health, and Technology will necessarily be the 3 areas that form the backbone of our country’s economy in time to come and hence areas where the government should encourage innovation and provide the necessary funding to drive great ideas. 

Nowshad Rizwanullah, Co-Founder & CEO, MissMalini Entertainment 

One of the few bright spots in the last two years has been the thriving startup sector, both in India and around the world. Historic levels of funding, innovation, employment and wealth creation put into sharp relief the benefits of entrepreneurship-friendly policies, whether through tax and financial incentives or the development of critical infrastructure. As digital becomes the dominant medium, policies that facilitate the rapid rollout and adoption of technologies like 5G and improved broadband penetration would be welcome. Continuing relief from the impact of COVID on both employers and employees would also help support economic recovery.