Budget 2009: Stimulus for print media extended by 6 months

Kishore Sharma - Televisionpoint.com | New Delhi
Finance Minister Pranab Mukherjee gave some much needed boost to the print media, when he extended the economic stimulus package for the print media by six months till December 31, 2009.

"Since the print media is still passing through difficult times, the stimulus package for the print media has been extended from June 30 to December 31 this year." Pranab Mukherjee said, while presenting the budget for fiscal 2009-10 in the Lok Sabha.

In February, a stimulus package for the print media industry included a waiver of 15 percent agency commission on directorate of advertising and visual publicity (DAVP) advertisements and a 10 percent increase in the DAVP rates to be paid as a 'special relief' subject to proof of loss of revenue in non-governmental advertisements.

With advertising slowing, leading publishers have asked the government - to revise DAVP advertising rates, abolish custom duty on newsprint and withdraw fringe benefit tax levied on the non-core salary components of their employees.

It maybe noted that the print ad spends dropped by 24 per cent and 32 per cent in New Delhi and Mumbai, respectively, during April and May 2009. Delhi and Mumbai are the largest print advertising markets, and April and May are very important months in terms of advertising.

Ravi Dhariwal, chief executive officer, Bennett, Coleman & Co. Ltd, says, "The issue that the industry has is that the DAVP rates are way below. We are forced to take them as there is no other option. The DAVP rates should be linked to the rest of the market."

Dhariwal adds, "The extension of the stimulus package, which is till December 31, will hopefully buy us some time till the new committee for ads comes into form. Only if the ad rates are revised and linked to the rest of the market rates would the government ads be worthwhile for the print industry.”

KU Rao, chief executive officer, DNA, said, "This extension is just a continuation of what the Government had offered earlier. What needs to be addressed and changed is that the Government must take a stand and look at a change in the policy. They need to be linked to the cost structures otherwise we will continue to bleed."

Sanjay Gupta, chief executive officer, Dainik Jagran, opines, "This extension is not at all enough, our demands are much more, but I feel any help is good help. It was nice of the Finance Minister to include this in the Budget."

Jacob Mathew, executive dditor, Malayala Manorama, said, “What I could gather so far regarding the stimulus package for the print media was only regarding the extension of the DAVP benefit (waiver of 15 per cent agency commission on DAVP advertisements and a 10 per cent increase in the DAVP rates to be paid as a 'special relief' subject to documentary proof of loss of revenue of non-governmental revenues), which is being extended for another six months."

Hormusji N Cama, president, Indian Newspaper Society (INS), says, "The Budget sops for the print industry do not come as a surprise, because they are merely a continuation of few concessions announced in October 2008, when DAVP advertising rates were revised. We were very well aware of the fact that the I&B Minister had put forward the demand for continuation of ad rates before the Ministry of Finance."

Cama adds, "The extension of concessions such as waiver of 15 per agency commission on DAVP (government advertisements) and hike of 10 per cent in DAVP ad rates are right moves, but these do not amount to huge benefits for the industry."

Colvyn Harris, chief executive officer, JWT India and vice-president, Advertising Agencies Association of India (AAAI), says, "Newspapers could manage to walk happy with DAVP concessions thrown in, but the truth is that a 10-15 per cent hike or reduction turns out to be nothing but a notional benefit."

Annie Joseph, secretary general, News Broadcasters Association (NBA), says, "The fiscal stimulus announced for the print industry in February 2009 has been extended for another six months. Even then, the broadcast industry was denied the benefits of the stimulus package; and this time too, we have been denied any concessions. This is nothing but discriminatory."

Apurva Purohit, chief executive officer, Radio City and president, Association of Radio Operators of India (AROI), says, "Unfortunately, radio has not been given any respite in this Budget. Nothing has been done to address the revenue loss suffered by the industry because of the economic slowdown. Sops doled out to print should have ideally been extended to radio as well, given the fact that it is a relatively nascent industry and also the only industry that pays the government a license fee."

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