Mumbai: India’s finance minister on Monday extended the stimulus package for the print media by another six months till 31 Dec, 2009, bringing relief to the industry hurt by falling advertising revenue.
“Since print media is still passing through difficult times, I have decided to extend the stimulus package for another six months...,” Pranab Mukherjee said in his budget speech.
“For print media it is positive. Another six months of extension will boost their revenue,” Anand Shah, an analyst with Angel Broking, said.
In February, a stimulus package for the industry included a waiver of 15% agency commission on directorate of advertising and visual publicity (DAVP) advertisements and a 10% increase in the DAVP rates to be paid as a ‘special relief´ subject to proof of loss of revenue in non-governmental advertisements.
DAVP is the publicity arm of the federal government.
The global economic downturn hurt advertisement revenues as key advertisers such as auto, airlines, real estate and retail players were forced to cut ad spend as consumer demand plunged.
However, the extension does not include broadcast media which too had sought similar relief, Shah said.
The finance minister also abolished fringe benefit tax (FBT), which analysts said, would help media and entertainment industry as significant expenditures were subject to FBT, pushing costs.
“The introduction of goods and services tax (GST) by 1 April, 2010, would streamline the service tax and value added tax,” said Farokh Balsara, partner and national leader, media and entertainment practice at Ernst & Young.
“However, the rejoice is short-lived with the minimum alternate tax (MAT) being hiked to 15% as against 10%. The introduction of 5% custom duty on set top boxes is (also) seen as a major dampener,” Balsara said.
Shares in direct-to-home (DTH) operators Dish TV India closed down about 8% while Sun TV Network ended down more than 4%.
Publishers did a little better with Deccan Chronicle down 6.5% and Jagran Prakashan and HT Media losing about 1% in a battered Mumbai market that ended down 5.8%.