‘Budget must boost consumer sentiment, spends’

The advertising industry, which is eagerly awaiting marketing spends to bounce back, is also keenly waiting for the release of the Union Financial Budget 2021. This year’s budget announcement by the Finance Minister Nirmala Sitharaman is slated for February 1^st.

Honchos from global media agency Dentsu shared their expectations for the advertising industry from the 2021 Union Budget. 

Ashish Bhasin, CEO-APAC and Chairman-India, Dentsu said, “I am certain that the growth in India will come from rural areas and not just from urban pockets or society’s privileged sections. I would like to see more money directly flowing into consumers’ pockets through tax incentives or other means so that they have more money to spend. Also, clients need to be incentivised to spend more on advertising since that would create a demand and spur the economy.”

 Highlighting the budget expectations, Bhasin explained, “I also expect the Union Budget to allocate funds toward investments in infrastructure. I am very bullish about India to flourish as an economy. However, to achieve our ambitions, we need a strong infrastructure, and this is the right time for us to be investing heavily in that.

On similar lines, Anand Bhadkamkar, CEO-India, Dentsu, said, “2020 has been a difficult year for businesses across the spectrum. What, therefore, is required from the budget is a boost to the consumer sentiment. We are definitely wanting tax rates to not go up further. Additionally, it will be great if businesses start getting some incentives for advertising and CSR activities. As an industry, we had appealed at the beginning of the pandemic to give us some relief to businesses on ‘allowability’ of advertising spends, as advertising eventually helps to boost the economy. On a larger perspective, there should be additional support for MSMEs and startups in the budget, which is the backbone of the Indian economy.”

“When it comes to taxation policies that advertising agencies are liable for, I believe that agencies don't mind the taxes. However, the taxation process is encumbered by complexities. It wastes too much time. The rationalisation of taxes, combined with smoothened transactions by a more simplified process will go a long way in benefitting our industry,” Bhasin added.

Bhasin also recalled that the Advertising Agencies Association of India (AAAI) had made a few appeals to the government in April 2020 to support the advertising industry. “There was a lot of money stuck with the government and the liquidity situation was too tight owing to the lockdown, at the time. While I am not certain whether it had had an impact on them but there was a partial response from the government wherein some of the funds held by the state governments were released. Nevertheless, now is the time to see if they would consider the much-needed tax incentives. I am hoping that the upcoming budget would be a growth-oriented one, which indirectly helps advertising and we know that advertising generates demand,” Bhasin summed up.