Monday, 10 March 2014

Interim Budget lowers STB price

The Union Finance Minister P. Chidambaram presented the Interim Budget 2014-15 in the Lok Sabha with an estimated plan expenditure of Rs. 5,55,322 crore and non-plan expenditure of Rs. 12,07,892 crore. To boost the manufacturing industry in India, the interim budget has reduced the excise duty from 12 to 10 per cent. This reduction will bring down the cost of set top boxes.  The grants-in-aid for Prasar Bharati has been raised marginally to Rs 2,331.58 crore for 2014-15 from the revised estimates of Rs 2,089.56 crore in 2013-14. There is no separate investment by the government in the pubcaster for the second year in a row. There is no change in income tax rates.
Prasar Bharti
Union Government in it Interim Budget has allocated Rs 2,331.58 crore as grants-in-aid to Prasar Bharti. The Government has also made provision of Rs 200 crore from internal and extra-budgetary resources for Prasar Bharti, while the total plan outlay for broadcasting is Rs 641.58 crore. The funds include allocations of salary and related expenditure of Prasar Bharti employees.
In December 2013 the Union Government had set up the Prasar Bharti Recruitment Board to meet the acute manpower shortages that have been plaguing the national broadcaster for years. Last year Prasar Bharti CEO Jawahar Sircar has passed a circular, in which he has estimated that nearly 15,000 posts in various capacities were vacant.
The broadcaster has also been asking for funds to improve its programming and services. In the Sam Pitroda Committee Report released in January this year, the Committee had advised the Government to give Prasar Bharti more power to hire, while scaling up funds for content generation to 50 per cent in the next five to seven years.
Excise duty on STBs reduced
Biggest relief the Budget has given to the Broadcasting industry is reduction in excise duty that would bring down the cost of set top boxes. Although the Interim Budget didn’t offer anything exciting for the media and entertainment sector other than this reduction came in the form of the Central Value-Added Tax (CENVAT).  The budget has proposed reduction in excise duty from 12 per cent to 10 per cent on all goods falling under Chapters 84 and 85 of the Central Excise Tariff Act schedule. Chapter 85 also comprises the Consumer Premises Equipment (CPE)—in other words, set-top boxes (STBs)—till 30 June 2014. Beyond that new government formed after the elections in April would decide the final budget. What it also means is that in the next four months, all imports of STBs will be marginally cheaper. As per market estimates, the industry will save around Rs. 15 crore (Rs. 150 million) during this four-month window. According to industry experts, a DTH STB will be cheaper by Rs. 45–55 while the digital cable boxes will be cheaper by close to Rs. 30 per box. It has been estimated that till 30 June, DTH will add 2.5 million subscribers and digital cable under two million. However, if the new government chooses to keep the rebate, MSOs and DTH operators will save around Rs. 300 crore ( Rs. 3 billion) as the industry estimate of the number of switchovers from analogue to digital during Phases III and IV of digital addressable system (DAS) is over 75 million. Meanwhile, Dish TV has applauded the government’s duty reduction move. The DTH player has been urging the government to waive the 12.36 per cent service tax till the roll-out of GST and rationalise other taxes levied on the DTH industry. Dish TV managing director Jawahar Goel said, “We welcome the duty reduction and hope that the multiple tax levies on the DTH sector will also be looked at and addressed by the next government.” However, MSOs feel that it will not change life much but it will definitely help in slightly reducing the import duty. In any case any reduction in tax is welcome by the industry in this mandatory digitisation when prices are already spieling. If it continues after July, when the real uptake is expected to pick up, it will be a good sign for the industry.
Other Allocation
The total budget for the Ministry of Information and Broadcasting has been raised to Rs 3,216 crore for 2014-15, as against the revised budget of Rs 2,855.03 crore (against the initial allocation of Rs 3,035.65 crore) for the year 2013-14.
In the Interim Budget, the allocation towards ‘Secretariat - Social services’ (covering the centenary celebrations of Indian cinema, digitisation of cable television, etc.) has gone up to Rs 129.55 crore, as against the revised estimates of Rs 79.72 crore. Other subjects include the National Film Heritage Mission, anti-piracy measures, promotion of Indian Cinema overseas, production of films and documentaries, and setting up a Centre of Excellence for animation, gaming and visual effects.
The allocation for Press Information Services which includes grants to the Press Council of India has been marginally increased to Rs 65.44 crore from last year’s revised estimates of Rs 57.56 crore to meet the expenses for the Press Information Bureau, the Press Council of India, and to the Press Trust of India for running the non-aligned countries news pool.
The allocation to the Electronic Media Monitoring Centre has been increased to Rs 13.75 crore for 2014-15 from the revised estimates of Rs 7.17 crore in 2013-14. The EMMC was set up for monitoring television and radio channels for violation of programme and advertising codes.
The allocation for advertising and visual publicity has been lowered to Rs 227.37 crore against the revised estimates of Rs 241.6 crore and budget allocation of Rs 239.06 crore for 2013-14, covering expenditure incurred by the Directorate of Advertising and Visual Publicity for publicity campaigns through advertising and other printed materials, as well as through radio, television, exhibitions and other outdoor campaigns.
The allocation for research and training in mass communication has been doubled to Rs 33.54 crore as against the revised estimates of 15.91 crore and budgetary allocation of Rs 17.8 crore for 2013-14. This will cover the Indian Institute of Mass Communication and the Research and Reference Division of the I and B Ministry collects and collates basic information on subjects of media interest for providing assistance to the Ministry and its media units, Indian missions overseas, and newspaper and news agencies.     There is a major increase in the lump sum provision for projects/schemes for development of North-eastern areas including Sikkim to Rs 90.5 crore for 2014-15. The budgetary allocation had been the same in the 2013-14 but had come down in the revised estimates to Rs 74 crore.
Apart from the above budget proposals, cabinet committee on economic affairs has also approved Rs, 3500 crore for infrastructure upgrade of Prasar Bharti.



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