Bright economic forecast bodes well for advertising biz
By M4G Bureau - February 03, 2023
Infrastructure development, rail expansion, EV promotion among factors that could help drive OOH/DOOH growth
India remains a bright spot in the global economy at a time when most developed countries are facing extremely stiff headwinds. The Economic Survey 2022-23 has forecast India’s GDP to grow at about 6.5% in 2024, which is still one of the fastest among major economies globally. Further, the Indian economy is also forecasted to scale $7 billion level by 2030, which would be achieved through all-around development of business sectors. Advertising business will stand to gain significantly as physical infrastructure develops at an accelerated pace, and as industrial growth takes a sharp northbound leap.
Budget 2023-24, presented by Union Finance Minister Nirmala Sitharaman in the Lok Sabha on February 1, provided for many of the catalysts for sustained growth, some of which are:
- Provision of an Urban Infrastructure Development Fund (UIDF) that, among other key priorities, will create urban infrastructure in Tier 2 and Tier 3 cities. This will be a boon for OOH expansion in these cities where consumer markets are looking up.
- Railways get a capital outlay of Rs 2.4 lakh crores, which the FM says is the highest-ever allocation since 2013-14. The rapid modernisation of rail infrastructure and upgradation of train services and passenger amenities will create the right environment for the Railways to boost its non-fare revenue (NFR) streams, of which OOH is one that promises much.
- To further provide impetus to green mobility, customs duty exemptions are being extended to the import of capital goods and machinery required for the manufacture of lithium-ion cells for batteries used in EVs as well. Continue concessions on Lithium-ion batteries for another year. The rapid expansion of EV passenger transportation and the setting up of a large number of EV charging stations will create the avenue for robust DOOH networks.
In addition, the revamped credit guarantee scheme for MSMEs to take effect from 1st April 2023 through the infusion of Rs 9,000 crore in the corpus could be useful to various equipment and device manufacturers who are looking to develop and supply smart and innovative solutions to the OOH / DOOH business. This scheme would enable additional collateral-free guaranteed credit of Rs 2 lakh crore and also reduce the cost of the credit by about 1%.