Advertising and marketing experts decode Union Budget 2023
The Indian government has announced a slew of measures to drive growth in AI, technology and sustainability. Social Samosa speaks to agencies and marketing heads to find out Union Budget’s implications from a marketing and advertising angle.
On February 01, Finance Minister Nirmala Sitharaman presented the Union Budget 2023-24. The advertising and marketing industry has welcomed the tech-centric budget with an optimistic perspective and have predicted that AdEx is likely to do well this year. Experts believe that the budget will give a boost to start-up culture, technology, MSMEs, agriculture and sustainability.
The industry is particularly enthusiastic about the government’s plans for Artificial Intelligence (AI). FM Sitharaman announced that the government would set ‘Centres of Excellence for Artificial Intelligence’ at top educational institutions with a focus on researching and developing practical AI applications in the fields of agriculture, health, and sustainable cities.
This is in line with the government’s vision of “Make AI in India and Make AI work for India.” With the government’s push, the country will see more AI-trained professionals with skillsets in Robotics and IoT.
To further accelerate technology’s adoption, Sitharaman said that the government would create 100 labs for the development of 5G apps.
The government is also working on a national data governance policy to enable access to anonymized data to start-ups in order to boost development.
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We reached out to digital, marketing and media industry to understand how the increased focus on digitalization, sustainability and AI can impact the advertising and marketing industry. Here’s what they said:
Kartik Sharma, Group CEO, Omnicom Media Group India:
Building upon the momentum of the year gone by, India’s 2023 budget is growth-oriented, future-focused, and abundant with reforms across all aspects of the economy.
At a time when all eyes are on India – poised to grow and thrive despite the looming economic slowdown, the standout for me is the strong thrust on Capex. The massive increase on this front shows the government’s commitment to boost infrastructure, industry-agnostic productivity, and the overall economy.
In keeping with its focus on inclusive growth, it is welcoming to see the budget checking the box for people from many walks of society and offering a strong and stable macroeconomic environment for all. There is positive relief on the personal tax front – making it a friendly budget for the common man. And the increase in the taxation slabs itself is a well-concerted attempt to move people to the new tax regime, expected to benefit millions of middle-class citizens in good time.
Giving impetus to the digital economy and transformation continues to be a key focus, with new frontiers of innovation like Artificial intelligence propelled front and centre – to galvanize its application across sectors ranging from agriculture to learning and others. The narrative for accelerated transformation is also evident across the education sector, with a heightened focus on upskilling the nation’s youth in new-age skills and courses like AI, Robotics, IoT, and more.
Furthermore, in addition to a lot of growth-focused benefits for rural, agriculture, and education, sectors like green energy, artisanal crafts, and even tourism – which has been impacted heavily over the past few years of Covid, have been given their due.
As companies earmark their Capex, advertisers will have their eyes set on these new policies and go forth with buoyancy in their minds. As a result, AdEx too is expected to do well for the year.
In conclusion, the overall budget is a progressive one to widen the country’s horizons and further strengthen India’s economic order on the global stage.
Simi Sabhaney, Chief Growth Officer, dentsu India:
My first reaction after reading about the priorities drawn out in this year’s budget was, ‘This is a perfect example of firing on all cylinders. India is preparing itself on all fronts, to take centre stage’.
This budget is most comprehensive and well-balanced because it has taken into account the key building blocks that are essential to get us future-ready and fuel our growth in the coming years.
Focus on infrastructure development, sustainability, MSME lending, honing the power of AI by setting up centres of excellence, boosting tourism and hospitality sectors, launching digital libraries to provide quality education, setting up Skill India International centres to promote entrepreneurship, agriculture accelerator funds to promote agri-startups in rural India, new tax regime, use of technology to enhance financial inclusion, all this and more showcases the audacious confidence that India has unleashed.
To my mind, this budget is growth-oriented, inclusive and responsible.
Anurag Bansal, Chief Operating Officer and Chief Financial Officer, DDB Mudra Group:
It’s a well-balanced and progressive budget entailing fiscal prudence. Income Tax relief provided to salaried class and middle class will help restore their buying power to a certain extent. No change in capital gain tax is a big relief to investors. Continued focus on capital expenditure, domestic tourism and agriculture will boost the economy, distribution, and consumption of goods and services. Advertising industry stands to gain as this budget will give impetus to consumption.
Atul Shrivastava, Group CEO and Executive Director, Laqshya Media Group:
The Union Budget 2023 is a landmark budget for the Advertising Industry in India, with a host of measures to drive growth and innovation in the sector. The government’s push towards green energy, the significant outlay for railways, urban infrastructure development, and the MSMEs & startup development schemes are all positive indicators for the advertising industry. The allocation of funds for 100 last-mile railway projects, more airports coming, and the urban infrastructure development fund will lead to increased transport growth, creating new advertising opportunities. In addition, the new income tax slab will boost the lifestyle of salaried individuals, boosting the Indian economy. This budget is a clear sign that the government is committed to driving the growth of the corporate sector, and we can expect to see exciting new developments in the OOH advertising industry in the coming years. Furthermore, the movement of people out of their homes keeps growing, and the government has allocated more resources toward improving infrastructure. As a result, it will generate a heightened demand for out-of-home media.
Ahmed Aftab Naqvi, Global CEO & Co-founder, GOZOOP Group:
Make AI in India’, ‘Make AI work for India’, 100 labs for 5G application development and 30 Skill India international centers are fantastic initiatives in the right direction to spark innovation and entrepreneurship that will further fuel Bharat’s growth and Atmanirbharta.
Siddharth Devnani, Co-founder & Director, SoCheers:
Empowering the youth and realizing the vision of “Make AI in India and Make AI work for India” stood out to me as an interesting initiative in the Union Budget 2023. India has the potential talent to invest in, and making a bet on an upcoming technology like AI is promising keeping a vision for the future.
Moreover, the ‘National Data Governance Policy’ is totally in sync with the best global data policies. Simply, because anonymity will ensure the privacy of citizens, while opening up information which can fuel growth across industries.
Sahil Chopra, Founder & CEO- iCubesWire:
The 2023 budget looks promising for the digital and technology sector. Emerging technologies such as 5G, Web 3.0, and Metaverse will give rise to new business opportunities. Moreover, implementing a comprehensive legal framework will strengthen personal data protection. Investments in tech innovation and digital asset creation will facilitate the development of a knowledge-based economy, with leading educational institutes taking the lead. With the development of three Centres of Excellence for Artificial Intelligence in its top academic institutions, we will move closer to making AI in India a reality.
Ambika Sharma, Founder & MD, Pulp Strategy:
The 2023-24 Budget focus inluded talent, technology, entrepreneurship, and sustainability. The effort towards boosting the economy at a time when the rest of the world is on the edge of a slowdown is commendable, we welcome the Union Budget 2023-24.
One of the important issues addressed was the stressed MSME ecosystem due to or in the duration of the pandemic, In case of failure by MSMEs to execute contracts during the Covid-19 period, MSMEs will get 95% of the forfeited amount relating to bid or performance security. This amount will be returned to them by the government and government undertakings. MSMEs are the growth engines of the Economy, and this move will help to boost their morale and will provide them relief.
Micro Enterprises with a turnover of up to Rs 2 crore and certain professionals with a turnover of up to Rs 50 L can avail of the benefit of presumptive taxation. Moreover, to support SMEs in timely receipt of payments, the Centre proposes to allow a deduction for expenditure incurred on payments made to them only when payment is made. The revamped Credit Guarantee Scheme will be in effect from 1st April 2023 through an infusion of Rs 9,000 crore in the Corpus. This will enable additional collateral-free guaranteed Credit of Rs 2 Lakh crore, further, the cost of the credit will be reduced by about 1%. We believe that India has a unique success story and a step towards being a global technology leader. This budget favors the new-age digital economy and we look forward to further growth in the sector.
Chetan Asher, Co-founder & CEO, Tonic Worldwide:
The focus on digital infrastructure is significant and is designed to keep the momentum going in the growth of our digital economy. Continued support for startups was much needed. Digital Library is a great initiative and an important step in boosting literacy.
Sukrit Singh, Cofounder – XP&DLand:
India has made leaps and bounds in terms of growing its economy, and with the Budget 2023, it promises to push technological advancements to the next level! With the new emphasis on emerging technology like 5G and artificial intelligence, the encouragement to develop these technologies in India has skyrocketed. As these new changes take shape, we can anticipate a rapid shift in how we use the internet and new services involving both of these technologies propping up in every aspect of our daily lives.
Gaurav Arora, Co-Founder of Social Panga:
It was a wholesome, Saptarishi budget presented by our Honorable Finance Minister, Nirmala Sitharaman addressing all the fundamental points and inclusive development model, necessary for overall economic growth. Enhancement in capital expenditure and improvisation of social-economic reforms of tribal communities are positive steps towards the upliftment of the economy. Prioritizing green growth and digital libraries for children and adolescents brings in major shifts in outlook and focus towards a green economy and young India. The Union Budget 2023 was a fresh breeze ushering into futuristic developments.
Marketing industry voices its enthusiasm about the government’s steps toward boosting start-up ecosystem
Gurjodhpal Singh, CEO, Tide India:
The budget 2023 lays down a slew of measures to boost the holistic growth and development of the entire MSME community, including the launch of a unified Skill India Digital Platform. This will help in enabling demand-based skilling, facilitating access to entrepreneurial schemes, and linking with employers, including MSMEs. Simultaneously with an infusion of Rs 9,000 crore into the corpus, the credit guarantee scheme will prove beneficial for MSMEs that are still recovering from the effects of the pandemic. While the scheme had a rough start, lending to MSMEs by banks has surged significantly in the past two years and the scheme has helped alleviate stress in the sector. Increasing presumptive taxation limits for MSMEs and certain professionals with a turnover of up to Rs 3 crore and Rs 75 lakh, respectively is another critical relief for MSMEs. This will help make tax filing simpler for small businesses as they will be relieved from the tedious task of maintaining books of accounts and their income will be calculated on a presumptive basis, depending on the turnover. I believe all these measures collectively will act as a catalyst to boost the Indian economy.
Abhishek Lodha, MD & CEO, Lodha:
Budget 2023 has unleashed the forces of growth in India. The government has not only focused on creative, productive capital expenditure and growing our infrastructure. But, also put money in the hands of the hardworking Indian consumer. With both these steps together, it will unleash and sustain India’s growth trajectory and help it overcome the challenging global conditions. I thank the Prime Minister and Finance Minister for continuing to support India’s hardworking middle class in growing their prospects and enabling them to realise their dreams of a better life.
Sanjay Vakharia, CEO of Spykar Lifestyle:
The proposal in increase spends on capex will keep the wheels of growth in motion. The government’s efforts on bettering yield of cotton productivity will help in keeping volatility in cotton prices at bay. The reduction in personal income tax slab and eliminating deductions will help in bringing in more spends and marginally higher dispensable incomes.
Currently we are facing tepid demand due to recessionary pressures; both overseas and in our country. We therefore welcome the budget this year as it is focused on growth, economic progress, modernization and sustainability.
Aditya V. Agarwal, Director, Emami Group:
This budget has delivered on all fronts. It is a progressive, growth-oriented pro-people budget focussed on consumption growth, ease of doing business and capital outlays. The budget puts a certain boost to the agriculture , rural economy and infrastructure sector which will definitely have a positive impact on the economy and demand creation. The investments in the agro storage and other infrastructure will help the sector significantly . Announcement on start-ups can be expected to go a long way in more job creation.
Dipak Sanghavi, Managing Director, Nilon’s:
The 2023-24 Union Budget appears to be well-balanced and forward-thinking. The Finance Minister has successfully managed to increase capital expenditure by 33% while lowering the fiscal deficit from 6.4% to 5.9%. This action will further improve the stability of the Indian economy. The investment in Capital Expenditure will enhance productivity in the long run and reduce inflation.
The food processing industry plays a crucial role in enhancing agricultural efficiency and generating income. The emphasis on promoting millet cultivation, consumption, and exports, combined with increased investment in fisheries and support for natural farming, is beneficial for crop diversification, sustainability, and nutritional improvement.
As a consumer brand, we are happy to welcome the much-needed revision in the tax slab. The revised tax slab under the new regime is a positive change as it allows more money to be in the hands of people, which can boost the economy and increase consumption in the FMCG sector.
We also anticipate other policies and reforms that will enhance the industry, such as tax incentives, streamlined clearance processes, and simplification of the GST for raw materials. All in all, this has been an inclusive budget.
Sunil Agarwal, Director, Vinod Cookware:
Budget 2023 was a crucial one, and by repeatedly addressing the entrepreneurial ecosystem of the country, the finance minister has shown hope in the industry. As for the retail sector, the easing of compliances is a commendable step toward empowering businesses. Now, companies can focus on growth and their people, thus immensely impacting the ease of doing business. With Vinod Cookware gearing up for expansion, this will prove to be an advantage.
Speaking from the consumer’s perspective, the income tax slab change is a relief for the middle class of the nation. It will not just enable them to increase their savings, but with an increased disposable income in hand, we will also witness a spur in consumer demand. Here’s hoping for a successful financial year for all!
Meet Jatakia, Director of Branding & Marketing, Cossouq:
With their intention of reducing compliance and decriminalization of legal provisions, the budget has taken positive steps towards encouraging development in the startup and MSME ecosystem. The Rs 9,000 crore corpus set to take action through the revamped schemes for MSMEs is an important benefit to come out of the 2023 union budget. Further, the cost of credit reduced by nearly 1% will decrease start-ups’ initial funding fixed cost, encouraging them to source funds from the government or banks.
Overall, as middle-class families will enjoy the tax slab going up to 7 LPA, I believe with more money left in their bank accounts, consumers will be motivated to spend more on leveling up their lifestyle as well. Lifestyle brand consumption, especially, I think will see a great hike. With certain measures easing the use of fintech platforms, consumers will open up a little more for spending digitally.
Karan Keswani, Managing Director, Brinc India:
Measures such as, ‘Make AI in India’ & ‘Entity Digi Locker’ will support solutions in Agri, Health, Fintech, Sustainable City Infra, etc. The ‘National Data Governance Policy’ will enable access to anonymized data for startups, academia & researchers, hopefully leading to data analytics & data science-led innovation across sectors.
The good part of this year’s budget, and also exciting for the youth, is the entrepreneurial & skilling initiatives that the center intends to fund. India has one of the largest talent pools globally, and skilling the youth for international opportunities signals the intention of ‘Make in India’ for the world. Similarly, in PMKVY 4.0, vocational training in high-growth sectors such as AI, Coding, IoT, Drones, Robotics, etc., for the youth will also help ensure the availability of talent in these sectors and will serve to boost the demand for new-age companies, startups, MSMEs and corporates operating in this space.