News

6^th July 2009, Delhi, India. The union budget was announced which had mixed baggage news for the media and entertainment industry.

Finance minister Pranab Mukherjee announced that in the budget this time they were completely doing away with the fringe benefit tax (FBT). According to the industry sources, FBT amounting to 20 percent was being charged for travel, food, hotel and other expenses incurred by the workforce of the media and entertainment industry engaged in the outdoor shoots. This brought relief to the workers of the industry.

Another government’s decision which brought relief was to continue with the benefits extended to the print industry as part of a stimulus package which was announced in February 2009. This would enable the print media to benefit as it would waiver off 15 percent agency commission on DAVP and hike of 10 percent in DAVP ad rates.

The immediate reaction of Budget showed in the stock prices and performance of some of the listed media companies. such as stock prices of Deccan Chronicle slumped by 14.57 percent from the last trading price of Rs. 74.15 on Friday, July 3, to Rs. 63.35 on July 6.

The third major yet not such a progressive announcement was the reintroduction of 5 percent customs duty on set top boxes under the Conditional Access System (CAS) which disappointed the direct-to-home (DTH) players.

Announcement for the Radio industry too was a disappointing one. The general impression amongst the players was that the finance minister had done nothing to address the revenue lost suffered by the industry because of the economic depression. There were statements that the benefits which were passed onto the print industry should have also been extended to the radio. As the proposal for moratorium on license fee and bringing radio especially FM Radio in the purview of priority lending sectors had not been taken care off. The industry’s demand for abolition for service tax on advertising had also gone unaddressed.

Hence, by the end of the announcement of the union budget, the media and entertainment industry had mixed reactions.