Union Budget 2024 | Expect FDI in print, tax holiday for theatres: BDO India partner on media industry

'The govt should consider introducing a tax holiday for new theatres to encourage investments in the exhibition business as well as streamline the approval process for opening new screens,' said Prashant Bhojwani.

Finance Minister Nirmala Sitharaman will present the Union Budget on July 23. News has emerged that Prime Minister Narendra Modi might have a more troubled Budget this time, to accommodate the wishes of his alliance partners JD(U) chief Nitish Kumar and TDP supremo Chandrababu Naidu. However, it is more likely that the Budget will be a feel-good one, coming on the back of the Rs 2.11 lakh crore record dividend to the union government from the RBI.

With the Budget mere days away, Prashant Bhojwani, Partner, Corporate Tax, Tax & Regulatory Services, BDO India, shared his expectations:

Foreign direct investment (FDI) in print: Currently, Foreign Direct Investment (FDI) in print (news and current affairs) is capped at 26 per cent. Globally, the print sector faces challenges due to digitalisation. Considering the trend of liberalising FDI caps and the sector’s need for investments in digital assets, it is advisable for the Government to consider increasing the FDI cap for print to 49 per cent under the automatic route, similar to the radio sector. This would help in attracting foreign investments into this traditional sector, supporting its modernisation and growth.

Tax holiday: Despite being the largest producer of films globally, with approximately 1,700 films annually, India’s screen density is only 6-8 screens per million population compared to China’s 30. Screens have a ripple effect on the economy providing opportunities for other economic activities such as housekeeping and food and beverage services, besides serving as a platform for film monetisation. Given this backdrop, the Government should consider introducing a tax holiday for new theatres [similar to section 80-IB(7A) of the Income-tax Act, 1961] to encourage investments in the exhibition business as well as streamline the approval process for opening new screens.

Infrastructure status: Broadcasting is inherently a capital-intensive business and requires substantial investments in digitisation, technology upgrade, infrastructure architecture and continuous content development. Despite these requirements, the broadcasting sector currently lacks infrastructure status. Granting this status would be beneficial as it could help in securing financing for future growth initiatives, among other advantages.

Union Budget 2024 | Making a record for any Finance Minister, Nirmala Sitharaman will be presenting her 7th Union Budget on July 23, 2024 under the Modi 3.0 government. While inflation has burnt a hole in the pockets of 'aam janata', will this Budget spell relief for Indians? Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.