Broadcasters demand lower taxes, moderate regulation

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SME Times News Bureau | 24 Mar, 2010
The Indian television broadcasting sector, which is expected to become a $11.5-billion industry by 2014, should have minimum government interference and a moderate tax regime, say experts and stakeholders.

"A light handed approach in regulation is what is necessary for a robust growth of the sector," says Simon Twiston Davies, chief executive of the Hong Kong-based Cable and Satellite Broadcasting Association of Asia (Casbaa).

"There is enormous potential in India. The recent growth in direct to home services is witness to the fact that people want new technology. The regulatory environment should be relaxed so that they could buy what they want to buy," Davies said.

The broadcasting sector in India is primarily regulated by ministry of information and broadcasting and the Telecom Regulatory Authority of India (TRAI). Investment proposals from overseas is monitored by the Foreign Investment Promotion Board.

Davies, in New Delhi for a conference on broadcasting, said Indian consumers were becoming more sophisticated and were demanding international standards in everything.

"Then why not in television," he queried.

"India needs to follow an approach that is pro-industry, pro-business and pro-consumers. Service providers can provide best services for everyone only when the environment for them is conducive and profitable."

Talking about taxation, he said the primary lookout for companies was good return on investment. "But on one side there are regulations for entering the market and on the other, there are illogical taxes. This illogical taxation must be addressed."

He said he did not for a moment allude that the government should not control things. "But too much of interference and regulation is never good for a growing economy."

A joint study by the Federation of Indian Chambers of Commerce and Industry (FICCI) and leading consultancy KPMG has estimated the Indian TV broadcasting sector to grow from $5.71 billion last year to $11.58 billion by 2014.

According to Jawahar Goel, managing director of Dish TV, a leading direct-to-home service provider, India was not only levying entertainment tax, but also imposing service tax, adding further to costs.

"If service providers have to pay so much in taxes, then how things will work. Regulation is a very expensive affair in India and getting licence is also not very easy."

Shyamal Ghosh, chairman of IPTV Forum, an industry body for internet-based television, also called for lesser regulation. "Regulatory issues need to be sorted out fast. Moving from the ministry to the regulator back and forth takes lot of time."

Echoing the concerns of the industry, Smita Jha, associate with PricewaterhouseCoopers also said excessive regulation was unnecessary.

"Too much of government interference dampens the competitive spirit."