Budget 2009: Wish list from digital media

Televisionpoint.com Correspondent | Mumbai
In the run up to Budget 2009, expectations from the digital media and online services sector are running really high. For a sector, which is growing at a CAGR of 60 per cent, is currently facing many challenges, given the restrictions by the government. Existing themes continue to dominate the sector wish list, which are discussed hereunder.

Online advertisement is done by small and medium companies to reach out to domestic and global markets. These advertisers do not have the financial wherewithal to advertise on expensive media like broadcasting or print.

But for the Internet, they would not be able to access the international markets. The SME's are the backbone for the domestic and international commerce, and the internet is the most viable medium for them.

Online services, which comprise essential services like jobs, matrimony etc, which again are in their nascent stage of development. Currently internet based online services are subject to service tax at par with other matured services. As a step to boost the online services sector, the Finance Ministry should consider exempting such services from service tax net, thereby offering a boost to the growth of this industry.

Cyber cafes serve those who either do not have their own computers or cannot afford a regular service at home, office, shop or institution. ST increases the cost of access to such people thereby depriving a large section of society of the huge benefits of this medium.

According to a recent research done by IAMAI, about 30 per cent of Internet users in India access the net from cyber cafes. Going forward, the upcoming 1,00,000 CSC's (Common Service Centers) being set up by the Government would also be impacted by way of service tax.

The internet based services in India are on a growth path. At this stage it is not only desirable but also essential that some short term fiscal benefits are extended to these segments with a view to encourage adoption of these services.

In the present scenario, a 5 year moratorium on service tax will allow this nascent industry to grow in size and stabilize. It will also help the SMEs grow and aspire to access newer segments of consumers in the domestic and international market.