The Budget announcement of the formation of Task Force for AVGC Promotion has come after years of efforts put in by the industry stakeholders who see the sector contributing significantly to the Indian economy
In a major boost to AVGC sector, Finance Minister Nirmala Sitharaman has announced to set up a task force for Animation, Visual Effects, Gaming, and Comics (AVGC) sector with an aim to develop world-class creative talent to serve domestic as well as global demand.
“The Animation, Visual Effects, Gaming, and Comics (AVGC) task force will be set up to build domestic capacity to serve our markets and global demand,” said Nirmala Sitharaman in her Budget speech for the financial year 2022-2023.
In the past couple of years the AVGC industry stakeholders had been vocal in demanding the government to create an AVGC taskforce and AVGC Skills Council given the sector’s immense potential in creating jobs and making significant contribution to the Indian economy. The two editions of CII Global Summit FX in 2020 and 2021 have created a framework and recommendations for AVGC Sector, going forward.
“Delighted that the Government of India has accepted our request to set up an AVGC task force to provide strategic direction and provide a fillip to the sector. Thanks to @MIB and the @CII for their encouragement of this initiative. I shall work to ensure that we partner the government to achieve exponential growth in revenues, jobs and global market share,” said Biren Ghose, Chairman, CII National AVGC Committee 2022 & Country Head Technicolor India.
“I think what is really important now is that we are moving towards a new experience economy. We have young people who are tuning into our content. I think they are going to experience some things that are even beyond conventional storytelling. Education too has changed forever. I believe that the tools and technologies, practices and protocols that we have created are going to influence every industry,” he said.
Biren Ghose believes that “technology has moved from being purely an enabler to storytelling to becoming very much center stage”. “The way in which India can innovate with digital technologies is going to put us in a really good position in the competition that’s going to happen between countries as we aspire to take market share on a global basis in the media and entertainment sector,” he said.
Saying that the Budget announcement of the formation of taskforce for AVGC Promotion has come at the most appropriate time, Ashish SK, Chairman, FICCI AVGC- XR Forum & Founder of PUNNARYUG ARTVISION PVT LTD, said that after setting a strong foundation in the last two decades the Indian AVGC – XR is poised to grow phenomenally in coming decade.
“The creative skills from India needs nurturing to a great extend to enable the growth of the AVGC – XR sector. Setting up of a task force for the promotion of Indian AVGC sector will definitely bring in a great focus on positioning Indian AVGC sector for services exports, co-productions, growth of Indigenous intellectual property and its consumption patterns within India and overseas,” he added.
He observed that the Indian AVGC – XR sector is expected to have a major share of the media and entertainment industry. “The horizon & use cases of AVGC – XR verticals have expanded beyond its day to day defined utility in Architecture, Life Science, Legal, Education, Industrial, Urban Planning, Sports, Digital universe, Metaverse etc apart from media &entertainment,” said the Founder of PUNNARYUG ARTVISION PVT LTD.
The AVGC industry has thanked Anurag Singh Thakur, Union Minister of Information & Broadcasting , for his unconditional support and belief in the AVCG sector as the champion of Atmanirbhar Bharat. “If we could tell stories that project new India and its products through our media, it will support our allied industries and sectors,” Anuraag Thakur had said.
He also added that he believed India has the potential to create “creative incubators that identify and groom talent in graphic design, sound animation and visual effects,” and capture its fair share of global visual effects, animations, graphics and sound market.
Chandrajit Banerjee, Director General, CII, believes that the AVGC sector holds great potential in contributing towards India’s 5-trillion dollar economy target. “The sector can really double its growth rate and easily become about a trillion rupees sector by 2025. And the amount of jobs it can create is such a powerful tool. We can easily create about 2.5 million additional jobs, making it one of the most important and exciting sunrise sectors to nurture,” he said.
Rajan Navani, Chairman, CII’s India@ 75 Council and Vice Chairman and Managing Director, Jet Line Group of Companies, said that Indian AVGC sector grew at a fast pace during the pandemic, as “we have a strong 300 million Gen Z population that probably no other country has”.
He added that India has now positioned itself for being able to be a part of the explosive growth. “eSports, where we look at professional sports gamers, is an area that is increasingly becoming popular around the world. It’s a very unique confluence of technology, youth culture, social networking, entertainment, community, sportsmanship, sports, entertainment, all coming together,” he observed.
According to K Madhavan, Chairman, CII National Committee on Media and Entertainment and Country Manager & President The Walt Disney Company India & Star India, the goal of India’s media and entertainment industry is to reach $100 billion by 2030. “The growth target remains ambitious but not difficult to achieve, provided we get the right support from policymakers and the government. India already produces 160,000 hours of content every year, which is the highest in the world. We’ll see the demand for original content to grow every day and more and more consumers getting access to the internet in tier-2 and tier-3 cities.”
Madhavan said that there has to be a clear cut roadmap for AVGC exports, creating global b2b opportunities, encouraging increasing convergence initiative between creators and tech innovators, and distribution hubs.
Addressing the CII SummitFX 2021 – Global AVGC and Immersive Media Summit, Piyush Goyal, Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution, and Textiles had highlighted that the AVGC sector is growing at 9% and is expected to reach ~Rs 3 lakh crore (US$ 43.93 bn) by 2024 (at a CAGR of 13.5%).
“AVGC is truly one area which has India’s creative talent at its very best. India’s agility and resilience that you have already demonstrated in the last 16-17 months through the COVID period has shown to the world that we are a trusted partner,” the minister said.
He said in the Spirit of “Local goes Global: Make in India for the world”, AVGC sector must look beyond boundaries to reach new horizons.
When we look at various areas of value creation in the Indian M&E sector, the AVGC sector stands out owing to its great potential in taking India’s M&E story to the next level, said Apurva Chandra, Secretary, Ministry of Information and Broadcasting, while speaking at the 10th edition of CII Big Picture Summit 2021. He also announced that the government was working towards creating a National Centre of Excellence for AVGC to provide a major boost for further development of the sector in India.
“AVGC is no longer a sunrise sector. The sun has already risen in the AVGC sector,” said Neerja Sekhar, Additional Secretary, Ministry of Information & Broadcasting, as she highlighted that the National Centre of Excellence for AVGC is a unique project where the industry needs to work together with the government to make it a success.
As per a report on Indian M&E sector released during the CII Big Picture Summit 2021 by the Boston Consulting Group India, VFX and Gaming can be the next IT-BPM boom and play a fundamental role in India’s M&E by 2030 with potential to create 75,000-120,000 direct and indirect jobs if India scales up its AVGC sector through structural interventions.
The Indian audiovisual sector is also a champion sector recognized by the Government of India. The Ministry of Commerce and Industry has identified this sector as a high potential for increasing job creation and export earnings for India. It was forecasted that the industry could create 2-3x growth in jobs over 4 years. Incentive packages and innovative forms of new fast-tracked education for skill sets were being discussed.
More than 70 per cent of the AVGC revenues comes from AVGC services to the global markets. The AVGC sector in India is poised to drive a similar growth to what the IT industry saw 20 years ago. Audiovisual exports in the next five to 10 years will be amongst the top 5 sectors contributing to the Indian GDP.
The AVGC sector has the potential to transform India into a global power for creative talent and help Indian society evolve by pushing it to reach the next level of learning, as well as engaging with the rest of the world by expanding in multiple dimensions, said Piyush Goyal, Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution, and Textiles.
Addressing the second edition of CII Summit FX 2021 – Global AVGC and Immersive Media Summit, the Minister said, “”AVGC is truly one area which has India’s creative talent at its very best. India’s agility and resilience that you have already demonstrated in the last 16-17 months through the COVID period has shown to the world that we are a trusted partner.”
Underscoring India’s “phenomenal success story” in service sector, the Minister said that India was able to fulfill all its service commitments throughout the COVID pandemic period, and is now growing at a very fast pace. “Despite facing losses in travel, tourism, and entertainment sector that we had last year, we were able to meet our service export commitments by about 97%. Indian service sector really came up to the world’s expectations, literally uninterrupted. Not a day or hour was lost in terms of whatever commitments our Indian industry had made to the rest of the world. It was astounding the way in which India responded to the COVID challenge,” he added in his address at the valedictory session.
Speaking on the potential of the sector, Goyal said that the AVGC sector can expand in multiple dimensions. “It can become multilingual, multicultural, and help Indian society evolve, and go to the next level of learning, as well as engaging with the rest of the world.” He added, that the world is looking for new avenues to meet their growing needs and Indian AVGC sector can gain the maximum as a trusted partner and become a global power for creative talent.
Citing the example of ‘Amar Chitra Katha’, he said that Indian stories can impact learning outcomes of the youth of India and can also have international appeal. “The children of today are growing up with animation, audio visuals, and comics in the form of animation. If we can expand our scope in the AVGC sector, we can actually impact learning outcomes of the youth of India, because we’ll be taking this to the rural areas of India, and really helping them understand what’s happening in the rest of the world. And you will also find a lot of hidden talent in the villages of India,” he suggested.
He encouraged the AVGC sector to look beyond boundaries and truly become an important segment in India’s global outreach in an effort to reach a trillion dollars of service export in the next 10 years. “Services sector is at a relatively smaller number today, compared to merchandise. But looking at the current speed of growth both the services and trading goods can easily achieve a trillion dollar export target. And in that M&E’s 100 billion dollar industry output will also contribute significantly to India’s exports,” the Minister added.
Hailing the efforts made by CII in promoting the AVGC sector, he invited the industry body for a meeting on Government of India’s Dubai Expo initiative, where India Pavilion would showcase the country’s diversity, its achievements and the future opportunities. “I call on all our experts from the AVGC segment from CII (and FICCI, ASSOCHAM) so that we can do an update on the curtain raiser. We can benefit from their expertise and their involvement in the larger vision to make India a success story at Dubai Expo. And going forward, I want to duplicate that in India also. I want to create a permanent pavilion like that in India,” Goyal said.
Chandrajit Banerjee, Director General, CII, highlighted AVGC sector’s contribution to India’s growth towards the $5 trillion economy target. “The sector can really double its growth rate and easily become about a trillion rupees sector by 2025. And the amount of jobs it can create is such a powerful tool. We can easily create about 2.5 million additional jobs, making it one of the most important and exciting sunrise sectors to nurture,” he said.
K Madhavan, Chairman, CII National Committee on Media and Entertainment and Country Manager & President The Walt Disney Company India & Star India, said that the goal of India’s media and entertainment industry is to reach $100 billion by 2030. “The growth target remains ambitious but not difficult to achieve, provided we get the right support from policymakers and the government. India already produces 160,000 hours of online video content every year , which is the highest in the world. We’ll see the demand for original and regional content to grow every day and more and more consumers getting access to the internet in tier-2 and tier-3 cities.”
He added that India has a massive strength of storytelling talent in the country, and the country should be able to create stories that resonate around the world. Madhavan said that there are few issues to be addressed like a clear cut roadmap for AVGC exports, creating a global b2b opportunities, encouraging increasing convergence initiative between creators and tech innovators, job creation, regional content creation and distribution hubs and support from government on various matters including the reversal of GST. “The soft power that would come from having a globally recognized media industry will have a large and multiple effects on GDP and employment,” he said.
Rajan Navani, Chairman, CII’s India@ 75 Council and Vice Chairman and Managing Director, Jet Line Group of Companies, said that Indian AVGC sector grew at a fast pace during the pandemic, as “we have a strong 300 million Gen Z population that probably no other country has”. He added that India has now positioned itself for being able to be a part of the explosive growth. “eSports, where we look at professional sports gamers, is an area that is increasingly becoming popular around the world. It’s a very unique confluence of technology, youth culture, social networking, entertainment, community, sportsmanship, sports, entertainment, all coming together,” he observed.
Biren Ghose, Vice Chairman, CII National Committee on M&E and Chair, CII Sub Committee on AVGC and Immersive Media and Country Head, Technicolor India, said that the 2021 edition of the CII Summit FX has seven states or representative associations on board. “We requested for a National AVGC Policy and an AVGC Skills Council. We have the draft ready for serious consideration of the government. A wonderful thing that has happened is that this industry now has become multi-ministerial,” Ghose added. He also pointed out primary grassroots level initiatives that have happened as a result of the platform provided by the CII Summit FX.
The second edition of the Animation, Visual effects and Gaming sector (AVGC) Summit is organised by CII in partnership with the Union Ministry of Information and Broadcasting (MIB); State Government of Karnataka and Software Technology Parks of India from 24th August to 29th August. The Summit which will end on August 29 has participation from over 4000 delegates, 114 expert panelists in 34 knowledge sessions. There were 21 international speakers from eight countries – USA, UK, Australia, Netherlands, Singapore, UAE, Canada, and Japan, who covered various issues concerning the global AVGC sector.
The AVGC sector will be the superstar of the new era and the Ministry of Information & Broadcasting is committed to support the Indian AVGC sector and play a facilitator’s role, said Neerja Sekhar, Additional Secretary, Ministry of Information and Broadcasting, Government of India.
“We would like to know the expectations of the industry from the government to which we are committed to support as a facilitator,” said Neerja Sekhar at the second edition of CII Summit FX 2021.
CII has been advocating for a National AVGC Policy to give a strong fillip to the AVGC sector by keeping in mind the requirements of 21st century. This resonated at the CII Summit FX 2021.
“We also need to collaborate with the states to promote AVGC businesses through various policy inputs. Promotion of skill sets in the sector has already been done by the Government of India through the Media and Entertainment Council,” stated Neerja Sekhar.
Neerja Sekhar emphasized that India has audiovisual coproduction treaties with 15 countries. “This can be a key for growth in this AVGC sector. We expect that these treaties will be leveraged with industry to strike more global partnerships.”
In 2020, the Ministry of Information & Broadcasting granted official co-production status to Noah’s Ark– A Musical Adventure under the Indo Brazil Audio Visual Co-Production Treaty.
In 2021, animation feature film Mia & Me — The Hero of Centopia was given the recognition as a co-production film by the Ministry of Information & Broadcasting under the Indo-German audiovisual Treaty.
Noah’s Ark– A Musical Adventure, a co-production among Walter Salles’ Video Filmes and Caio and Fabiano Gullane’s production company Gullane, partnered with Indian animation studio Symbiosys Technologies, headed by CEO Naresh Kumar with studios in Visakhapatnam and Hyderabad.
The Hero of Centopia, is a co-production between Studio 100 Media GmbH, Studio B Animation Pty Ltd. and Broadvision Services Private Ltd.
“We hope that we can move further in this area to come up with extraordinary content, loved by not only the two co producing countries, but the rest of global audiences as well,” noted Neerja Sekhar.
“There’s so much content in our culture that we can actually learn about. Let’s look forward for promoting production of more creative and homespun stories, our indigenous narratives and local languages, this sector can make India a hub for the toy industry, encouraging creation of digital games based on Indian characters and culture,” said Neerja Sekhar.
Speaking on the National Centre of Excellence for AVGC, Neerja Sekhar said the Ministry of Information and Broadcasting is setting up in Mumbai in partnership with the IIT Bombay is moving ahead and with large number of courses for specialists, practitioners and beginners have been visualized and charted out.
The six-day Summit FX (August 24-29) has been organised by CII in partnership with the Ministry of Information and Broadcasting; State Government of Karnataka and Software Technology Parks of India.
India needs an AVGC Council to integrate all the efforts being made by various State Governments, Central agencies and private combined learnings and avoid reinventing the wheel to maximize the availability of resources being deployed by these institutions.
Advocating the need for a National AVGC Skills Council, CII has emphasized that focus on education and skills will be a major pivot for the growth of the Indian AVGC sector
India has audiovisual coproduction treaties with 15 countries. This can be a key for growth in this AVGC sector. These treaties will be leveraged with industry to strike more global partnerships.
The global market size of AVGC sector is close to $260 billion to $275 billion, India’s market share is 1 per cent which comes to $2.5 Billion. Some of the key issues for deliberation at Summit FX 2021 included defining a roadmap for exports as a key initiative and roadmap to leapfrog from current $2 billion to $20 billion creating global B2B opportunities.
AVGC produced locally attracts 18 per cent GST in India while there is no GST on AVGC content produced from outside the country. The government needs to abolish GST or reduce it to a minimum level to encourage local production.
eSports and Gaming are growing at a galloping speed in India. Focus on IP creation, skilling, training are key elements for the growth of the AVGC sector.
eSports is becoming mainstream, the cross platform play in gaming is enhancing both the opportunity and the monetization potential of this sector, 5G is set to boost cloud gaming, and more and more women will be seen playing online games in a few years from now.
Service exports from Animation, VFX and Gaming account for over 70%. It is a major source of export revenue for the country. Therefore, focus in the National AVGC policy should be to develop a special package to achieve higher exports and scale infrastructure facilities for the AVGC sector across every state.
Seeing the way that the Game Engine can function and the benefits it offers is going to be quite revolutionary for the film industry going forward. By embracing Game Engine filmmakers might actually be able to do world class work without having to dedicate huge production budgets. Unreal and Unity among others are advancing these technologies significantly.
The success of AVGC sector is fuelled by the respective AVGC policies and actions by the state governments of Karnataka, Telangana, Kerala, Maharashtra and Madhya Pradesh can be emulated on a national level. Many other state governments are currently advancing such an agenda.
Each state can specialize in one particular segment of the AVGC industry, and should ensure that Indian MSMEs are given special incentives in that segment venture capital funding and startup labs etc.
The six-day virtual summit will see over 40+ Knowledge Sessions and over 100 speakers deliberating on a wide range of issues that cut across the spectrum looking to develop a cohesive industry engagement with core cross-sectoral policy dialogues and strategic exchanges.
CII SummitFX 2021 will see experts from the UK, the USA, Japan and key states like Telangana, Karnataka, Odisha, Madhya Pradesh, West Bengal and Jammu and Kashmir coming together to discuss the AVGC segment, and its transformation of India into a global leader. This platform will seek to curate and create an environment conducive to helping build a better future and achieve the targets of the segment.
(Highlights will be updated regularly during the CII Summit FX 2021)
Advocating the need for a National AVGC Skills Council, Biren Ghose, Vice-Chairman, CII National Committee on Media & Entertainment and Country Head, Technicolor India, emphasized that focus on education and skills will be a major pivot for the growth of the Indian AVGC sector.
Presenting curtain raiser for CII Summit FX 2021, Biren Ghose said policy sessions on the AVGC sector, with focus on games in emerging verticals, sessions on eSports, virtual production, content pipeline, AVGC startup ecosystem, interaction with global masters and talents on behind the scene presentations on how to win an Oscar and talent will be major talking points this year.
Biren Ghose explained the rationale behind this year’s Summit FX theme — The Reset. “A new era of a continuing growing opportunity has emerged. The AVGC sector had so far grown in India as a B2B industry, and revenue had come from global services. The last 18 months saw a major B2C agenda and consumers embraced entertainment (streaming platforms or games) and revenues have grown exponentially higher.”
“We have the ability to increase our business by 100 per cent. But we are constrained only by the fact that we cannot, across the board, get the skill sets,” said Biren Ghose. “I think with the new education policy, we’ve got now the ability to plant the seeds at an even earlier stage.”
Biren Ghose called for the need for industry participation in at least one or two international festivals of animation, visual effects, gaming and e-sports, on the lines of participation in international film festivals. “This is where we will get the opportunity for India to present what it’s doing and how things are shaping up. It is very important to us.”
Biren Ghose called for a stable climate to attract investments as the industry has a robust ability to absorb international investments. “I will not go into detail except to say hundreds of millions of dollars of venture money has come into India in the last 24 to 36 months, just fueling the new economy in AVGC. And I think those investors are looking for a more stable and more enabling climate, in the confluence between government, industry and academia in order to redouble those efforts, because this is like the startup round of what they put in. And I think it opens the door for a lot of enlightened conversation and a spotlight on what we can do even further.”
The Animation, Visual Effects, Gaming Comics (AVGC) sector has the potential to be a global success story for India and can transform the same way the IT revolution did, said K Madhavan, Chairman, CII National Committee on Media & Entertainment and President, The Walt Disney Company India & Star India.
Addressing industry leaders at the second edition of CII Summit FX 2021 (Global AVGC & Immersive Media Summit), Madhavan emphasized that AVGC sector can play a major role in achieving the Indian Media & Entertainment target of $100 Billion by the end of the decade.
“The question is how fast we can travel and how fast we can aim for 5 per cent global market share with an annual growth of 30 to 35 per cent,” asked Madhavan. “This is possible if the industry, government, regulator and policy makers work together with the definite agenda and we can help achieve this target.”
The global market size of AVGC sector is close to $260 billion to $275 billion, India’s market share is 1 per cent which comes to $2.5 Billion. Some of the key issues for deliberation at Summit FX 2021 included defining a roadmap for exports as a key initiative and a roadmap to leapfrog from current $2 billion to $20 billion creating global B2B opportunities.
“We should encourage convergence initiative between the creators and technology innovators. That is very critical as the technology is changing minute by minute and how are we equipped to address this. There is huge demand for VFX and animation locally and unfortunately, we are not in a position to meet the (global) requirements,” stated Madhavan.
Madhavan was optimistic of emerging job creation and pointed out that skill and labour is a key factor in the AVGC space. “We have over 400,000 engineers coming out every year from the engineering colleges. We need to train and get them into this industry.”
Madhavan also called for a relook at GST for AVGC Sector. “We are still charging GST at the rate of 18 per cent. That’s why local production studios are forced to move the service outside India and import back to India – so that they don’t have to pay GST. This is a long waiting agenda for the industry. I request the policy makers to look at this seriously.”
It has been a tough time for the film industry in particular the last couple of years with theaters being shut across the country. But the bright spark is obviously been the OTT platforms for making it much more accessible for audiences who’ve been in such desperate need of entertainment over the last two years, said Siddharth Roy Kapur, Co-Chairman, CII National Committee on Media & Entertainment , President – Producers Guild of India, and Founder & Managing Director of Roy Kapur Films.
Speaking at the CII Summit FX 2021, he said, “I think a lot of us in the film industry are scratching our heads and wondering what the future will hold. Now that such convenience has been so widely available to people and they’re so used to it at their fingertips, what does the future of theatrical entertainment really look like?”
He said that a big screen theatrical experience are really things that the film industry needs to focus on when it comes to creating content for the big screen. “And of course, intimate dramas and relationship movies and light comedies, etc., are more likely to be consumed on OTT platforms in the future,” he added.
According to Kapur, “And that, therefore brings me to the AVGC part of it. If we have to make these big ticket entertainers, which involve new worlds, fantasy, magic, realism, VFX, all those things that make a big screen experience really compelling, I think it’s important for filmmakers to really be able to embrace this technology and realise what it can do for their storytelling, I have to admit that the level of training in the industry, when it comes to being able to use these tools is still very, very low. And I think if we really have to move forward as a creative industry, we know we’ve got the skill sets, we know we’ve got the people to actually get the work done, but it’s about the creators embracing this as a way to tell their stories.”
Giving an example of what he meant in terms of training and skill development, he said, “I got the creator of Narcos, a show that is a global hit on Netflix down to talk to our writers and directors here in India about how to structure a series, because we’re used to making movies. And then we’re used to making daily soaps. And we haven’t ever been used to making premium quality digital content. That’s a confluence of both these, the quality of a film, but the length of storytelling and the breadth of storytelling that a series involves.”
Kapur said Narcos creator was very appreciative of the talent and he felt that there was a lot of great talent in the room. “But he did say that as with most things in India, we realise we are skipping multiple generations of growth. We are going straight from daily soaps and movies into creating long form digital premium content.”
He went on to add: “I think if there is one thing that I think that we need to focus on, it is skill development in training. When it comes to our creative people, we should be able to give them the opportunity to use the tools available to them today to be able to fly and tell the stories that they have to tell. So if there’s anything that we can do going forward in that regard, I think that’s where our focus and our attention should be. Because there are stories from India that we can take to the world and get the world to resonate with.”
Kapur concluded by saying that we need to have a Parasite, we need to have a Crouching Tiger Hidden Dragon, we need to have our movies that are able to go out into the world and do the sort of business and create the sort of popular culture and soft power that so many other countries have managed to do. “I’m sure we will do it. But it needs to happen in a more structured way. And not by default, but by design.”
The Media and Entertainment sector, through the Confederation of Indian Industry (CII), has sought industry status for itself and infrastructure status for broadcasting, ahead of the Union Budget 2021 to be presented by the Finance Minister on February 1.
The M&E sector has been growing at an estimated gross annual rate of around 13.5% for the past several years and has shown the potential to reach $100 billion by 2030. But despite being one of the top revenue earners for the government and having expanded India’s soft power reach globally, the sector has been conspicuously absent from the list of focus sectors in the Union Budgets for over two decades now.
However, in the wake of Covid-19 pandemic, the M&E sector has been grappling with multiple problems owing to the economic lockdown and social distancing restrictions put in place. Now, through the CII, the sector has come up with a Pre-Budget Memorandum 2021-22 that recommends a number of changes to help it stand back on its feet.
“The sector has been growing at a gross annual rate of 13.5% for the past several years and has the potential to provide millions of jobs and boost India’s export performance. Getting industry status will help the sector get cohesive policies, special schemes and subsidies,” says the pre-budget memorandum.
It also adds that infrastructure status for broadcasting would give it the much needed support to get access to funds at a lower rate for laying cables, and building and maintenance of towers.
Under the direct tax recommendations, CII has sought a change in withholding on royalty payments towards non-theatrical rights. It said that non-theatrical rights of films such as those for digital and satellite platforms are currently subject to a 10% tax. The industry body is of the view that the rate of withholding tax on domestic royalty payments towards non-theatrical rights be brought down to 2% on a par with what is levied on earnings from sale, distribution and exhibition of cinematographic films. “This would come as a huge respite to the industry, particularly for small production houses, by addressing their cashflow issues for working capital requirement,” the pre-budget memorandum says.
“There is a huge shift in viewer preferences and the use of technology for consuming cinematographic films. A lot of films are directly released on satellite or digital platforms, which are becoming the more popular medium of content consumption among viewers. With the advent of technology and its fast growing pace, making a distinction between the medium is not in line with the current trend of consumption,” the memorandum adds.
Further, under its GST recommendations, the industry body has sought an alternative payment mode for discharging GST liability under Reverse Charge Mechanism (by way of utilizing ITC also). The rationale behind the proposed change, it says would address the problem of huge piling up of ITC in media service industry and resolve cash crunch. “Since credit ledger is already allowed for payment of output liability, extending the same for even RCM liability is a small favour to the entire business community in India in these stressed times,” the industry body urged the government.
The industry also wants removal of interest payable whilst reversing ITC availed, from Vendors whose invoices aren’t paid within six months. Citing the 28th GST Council meeting, held on 21st July 2018, which agreed to industry’s representation, the memorandum says, “By delaying the payment to the Vendor, the revenue has not been deprived of its tax due, as the Vendor has already deposited the tax to the Government. While the control to ensure bogus invoices aren’t in vogue is understandable, it is not just to demand further interest also from the recipient, after having got the taxes already from the Vendor.”
To eliminate the cascading effect of tax and thus reduce the tax burden on the end consumer, CII has recommended removal of sponsorship services from the list of services to attract GST under reverse charge mechanism (‘RCM’). Suggesting three alternatives to this change, the industry body says that either sponsorship services should be covered under forward charge “which will allow taxpayers to avail full credit of tax paid on procurements”, or sponsorship services provided by body corporate or partnership firm should be excluded from RCM. As a third alternative, “supplies made which are covered under RCM should be excluded from the value of exempted supply for the purpose of reversal of input tax credit,” says the memorandum.
It further adds that allowing GST input credit on certain regular business expenses like renting or hiring of motor vehicles used for business purposes or food and beverage purchased and outdoor catering services availed during the production of television content and movies will help bring down business expenses for TV programme producers, broadcasters & movie makers and be helpful mostly in case of in-house production. “Amount paid to makeup artist is part of giving creative life to a character in the content which is very important. Please remove the blocked credit for this industry for these items,” it says.
The industry also seeks an increase in the time limit of 24 hours for generating IRN on the NIC portal to 96 hours “for businesses to sufficiently comply with relevant provisions”.
Another issue, CII points out, is that credit notes after a merger or amalgamation is consummated, which is “causing business cost since the credit note with GST is not something the tax payer can upload in the GST portal, which mandates mentioning of the GSTIN & Invoice Number against which the credit note is tagged to.” The industry suggests an update in this regard on the GSTN portal to allow the option to choose Amalgamation as a reason and report Credit notes against invoices raised on earlier GSTIN.
The industry has asked the government to consider as a part of relief package allowing a one year time from the end of the financial year to avail ITC, as the time line of 6 months from end of FY for availing input credit for a financial year is too short given the Covid situation.
The pursuit of excellence of the human mind is individual and that’s what makes creativity great. This is what Amit Khanna, former chairman CII National Media & Entertainment Committee and former Chairman, Reliance Entertainment said at the CII Big Picture Summit 2012.
Amit Khanna, media guru, poet, lyricist, writer, filmmaker and historian will be giving his thought leader address crystal gazing where the media industry is heading at the 9th edition of CII BIG PICTURE SUMMIT 2020 (December 16-18)
SPECIAL ADDRESS: Amit Khanna, CII BIG PICTURE SUMMIT 2012
It has always been said that time has come for India to reap its demographic dividend. We are a youthful nation, What does Young India mean specifically for media and entertainment? It has been noted over the years by experts and sociologists that it is the young who not only consumes M&E but also are trendsetters. However, in the recent past, trends have emerged in more developed markets that as we move towards a digital world (a networked society) more and more niches emerge in the media and entertainment universe. There are sufficiently large pockets of people who are willing to consume different kinds of films, television, new media. Hence it becomes a larger pie with more people able to consume it.
One of the realities which many of us seem to overlook is a change which will happen in the next ten years. In the digital universe demographics get blurred. Because the ease of access gives the ability across ages across psychographics to access news, information, entertainment often from sources which were unattainable till a few years ago.
We are way down in the per capita consumer spend on media and entertainment. In more developed markets they are as high as five or six per cent. In some of the other competing markets like Brazil or China it is still much higher than India. As people become more aspirational, connected with different devices, through the development of viewer access technologies and with all content ultimately resting in the cloud consumption will go up in geometric progression. It has been noted that society grows in arithmetic progression. It is a slow progress. But, technology propels in geometric progressions. It takes leaps of several generations with each technological advancement. The problem is trying to reconcile the pace of social change with the rapid speed of technological change which is happening simultaneously. We all know of the famous analogy of several India’s exist together in different times and space. However, it is imperative for us to tap and address each and every citizen of these India which ultimately create the whole India.
Similarly, the ad spend to GDP ratio is amongst the lowest in the world (in top twenty countries of the world). There is no other way as consumption goes up these ad spends will go up audience measurement techniques will emerge and you will see ad spends rising in a competitive landscape.
Short term predictions
What we are heading toward is something Walter Manning, founder of Jwt said forty years ago when he was setting up the media lab at MIT. He said 21st century media will be all about personalised segmentation of media. It is that what we are heading to. We are going to see enhanced, relevant, curated content being consumed. Time is the only finite factor in consumption. You have only 24 hours to do work, play and entertained. Within that space there will be lot of competition in trying to monetize leisure. Leisure has become a larger world used when we talk about media and entertainment. It is no longer about watching news or listening to the radio or going out to a concert or watching cinema in your neighbourhood multiplex it is also events like Formula One. It is also about going to other social gatherings. We have seen social media groups form community groups which meet often and are now just about beginning to get monetized. HDTV or 3D Cinema are in the beginnings of what I would call enhanced viewing experience. You will in the next five or seven years come towards immersive TV, come towards films which will have multiple endings suiting different markets. It will be the same narrative but the filmmaker shoots two or three different ends depending upon the geography or demographics to suit those audiences. The most significant thing is curated. As digital technology develops, and we move from the present semantic web (Web 2.O) to intuitive web (Web 3.O) and the next which is currently being finalised in the labs we will find machine to machine talk becoming easy (Web 4.O). These huge large databases will talk to each other figure from our digital footprints what our interests are lead us on to that entertainment, news, information, music. It is for us to monetise these new revenue opportunities. Cross Section, Cross Segment competition is something we have to be cautious about.
The only thing in this world which is not fungible in this global world is talent. Talent, cannot be outsourced. Everything else can be. Processes, manufacturing. Talent is individual. The pursuit of excellence of the human mind is individual and that’s what makes creativity so great. More such opportunities are there in this huge currently untapped digital landscape. It is almost as if the mariner has landed on the mars and just dug up a little sample and telling us what is in store for us.
I welcome changes. But I am a very old school person where I enjoy watching films in theater with the community, says actress Taapsee Pannu, while talking about OTT and cinema halls at CII Delhi eConclave ‘Building Delhi for a New World’
The film fraternity is together in this (Covid-19) crisis. There are a lot of workers who depend on weekly wages and all of us have decided to take care of them till the time the economy gets back to normal. I believe that when things return to normal, people will flock the theatres again. You can’t replicate the theatre experience with streaming websites, says Taapsee Pannu.
While speaking on nepotism in the film industry, the actress, who is popular pan-India thanks to movies in Hindi, Tamil and Telugu, mentions that favouritism, being integral to human nature, will not go out of the industry and we cannot totally get rid of it.
“I also have that urge of going back to work because I’ve never had Monday blues. We don’t have weekend or weekday in our profession. I am finally looking to going to work knowing probably that I will be the last one going to work,” she says, at CII Delhi eConclave ‘Building Delhi for a New World’.
On Covid, the actress says, “We never believed that such a crisis will happen. I guess none of us have prepared for it. We are lucky enough that many of us still survive. But there are so many who have literally hand to mouth existence in terms of not just the labour workers, but people who earn per shoot or per day basis and, and those people I don’t think can survive beyond a few weeks. The industry did come together to raise funds and then help these people out in a lot of ways. Also migrant workers walking back home are painful insights of Covid.”
Talking about OTT and big cinema, Taapse says, “I welcome changes. But I am a very old school person where I enjoy watching films in theater with the community. Rarely do we see people just going alone to watch a film. The experience of going in a big dark hall and focusing all your energy on a huge screen can’t be replicated anywhere else. II was not an ardent OTT viewer before lockdown happened because an average film also will look good to me in a theatre. I enjoy watching films in theatre and really miss that. I have a firm belief that when things get back to the old normal, not the new normal, I think everybody is going to rush to theater to have that experience with all safety norms. OTT platform is good as a temporary fix.”