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BUDGET PLUS The policy implications of Phase III hold more promise, says Apurva Purohit

No specific sops for radio


Posted: Mar 03, 2008 at 2345 hrs IST
Updated: Mar 03, 2008 at 0005 hrs IST

The Budget has little to offer to the media industry in general and to the radio industry in particular. No specific measures that could contribute to the growth of the radio industry have been announced.

In fact, the policy implications of Phase III hold more promise for the radio industry in particular than the Budget. Indeed, we are happy that many of the views—of both large and small players—have been taken on board by the TRAI, keeping in mind the need to deregulate this industry further.

Although one still needs to access the fine print, one can draw inferences from certain developments. For example, the development and supply of content for use in advertising purposes has been brought under the service tax net. This is likely to see an increase in advertising costs resulting in a slowdown in advertisement revenues to broadcasters and print media, which will ultimately be passed on to the consumer. The extent of this slowdown on ad revenues however also depends on the performance and growth potential of industries such as FMCG, pharma, telecom and software that are involved in huge ad spends.

Overall, the Budget can be classified as a populist one. The increase in the exemption limits on personal income tax is positive for the salaried class. However, the fact that there is no change in corporate income tax is a disappointment. Reduction in the base rate of excise duty from 16% to 14% is positive for the industry overall.

The author is CEO, Radio City, & president, AROI

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