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Union Budget 2018: Radio wants reduction of license fee, 5% GST slab

31-January-2018
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Union Budget 2018: Radio wants reduction of license fee, 5% GST slab

With the Union Budget for the Financial Year 2018-19 a day away, everyone is looking forward to what it brings to the table. One needs to bear in mind that 2017 wasn't favourable for the radio industry as its advertisements felt the combined jolt of RERA and GST along with demonetisation. But the industry is way past that and expects better streamlining of tax laws, lowering the license fee for operating in smaller cities and bringing it under five per cent GST slab in the upcoming budget.

We talked to players in the sector about what they expect from the budget which may improve the infrastructure of the sector.

For Tarun Katial, CEO, BIG FM, lowering the license fee for operating in smaller cities and a better FDI will encourage more investments. He explained, "The upcoming Union Budget will be crucial in terms of the upgradation and streamlining of tax laws, some of which still remain unclear to the M&E sector. From a radio point of view, lowering the license fee for operating in smaller cities and a better FDI regime will encourage more investments, which will boost long-term growth for the industry. I also think the employment sentiment in the country is positively poised and the government should consider allocating a significant percentage of funds to create jobs in the dynamic M&E sector, which has been receiving a lot of attention from aspiring job seekers."

Nisha Narayanan, COO, 93.5 Red FM, is hoping for the government to announce some incentives for the private FM radio industry. She added, "Current reserve prices for some cities had kept a lot of players away from auctions in many BC & D type of cities. During the year, we hope that there will be progress on digitisation for FM and private FM operators will get subsidy for import of latest technology to move from analog to digital. And once that's done, we will be able to see newer formats and variety in content."

Narayanan also wants to radio to come under 5 per cent GST slab instead of 18 per cent to boost advertising. She said, "We hope that as print, we will also be bracketed in 5 per cent GST slab instead of 18 per cent to boost advertising from retailers and small traders. This is crucial as FM radio will now have footprints in over 400+ cities of the country and lot of new businesses can look at radio to expand their business."

She further demanded, "Govt should exempt our non-radio business (i.e. events, activations, digital, talent marketing and content monetisation) from revenue sharing to improve our bottom lines."

Prashant Panday, MD and CEO at ENIL- Radio Mirchi, looks forward to government reducing corporate taxes in line with FM's announcement. He added, "I have only two suggestions to make. First, I would like the government to show stability. More than new announcements or new policies, we need stability of policies. No sudden and drastic policy announcements please. Second, it would be good if the government showed some progress on reducing corporate taxes in line with the FM's announcement several years back. Equally, the government must recognize the real inflation that a common man faces - GST has increased costs of most services, fuel prices are rising through the roof etc. The government should announce a new plan to rationalize direct taxes for individuals also now."

Having successfully withstood the short-term operational issues of GST, radio is ready to reap the long-term benefits of these economic reforms according to Abraham Thomas, CEO of Radio City, 91.1 FM. He added, "We are expecting the Finance Ministry to present a reform-oriented budget, primarily focusing on the rural, social and infrastructure sectors. This will help further strengthen the Indian economy which is already on the growth trajectory. The enormous push on the infrastructure sector, social and rural sector in particular, will go a long way in generating additional income and employment. This will in turn provide direct and indirect impetus on the growth of the broadcasting sector through enhanced spends on advertising."

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