Indian media, entertainment industry to grow at 10.6%: PwC

Mumbai: The Indian media and entertainment industry is expected to grow much faster than the global M&E industry according to the PwC's 2017 Global E&M Outlook. The report pegs the global entertainment and media industry to clock 4.2 per cent CAGR from 2016-21 while India is expected to grow at 10.6 per cent. The Indian M&E industry is expected to exceed Rs 291,000 crore by 2021.
The key takeaways from the report are in line with major industry trends: TV advertising will continue to command a huge share of the advertising pie, though internet advertising will emerge as the fastest growing advertising platform. Also in line with current trends, the report predicts India to be among the largest and fastest growing newspaper markets in the world, owing to the popularity of vernacular publications, and increasing literacy rates.
Growth forecast: India vs Global for 2016-21
Sector India CAGR (%) Global CAGR (%)
TV Advertising 11.1 2.8
Cinema 10.4 4.4
Internet Advertising 18.6 9.8
Newspapers 1.1 -2.7
Internet video 22.4 11.6
TV subscription 11.6 1.3
Total M&E* 10.6 4.2
Source: PwC’s 2017 Global E&M Outlook *Total M&E not a sum of sectors listed. Radio, books, magazines, music, gaming also considered in total revenue

Frank D'Souza, Partner & Leader-Entertainment & Media, PwC India, comments, "Unlike the global economy, which will see a shrinking contribution from the Entertainment and Media sector over the Outlook period, in India the sector's growth rate will outpace the overall GDP growth rate. Being a relatively under-developed market in terms of per capita spend on entertainment and media, will allow India to grow at 10.57 per cent over the next five years to an overall size of Rs 2,90,539 crore."
He adds, "Also, being the least digitised market, will allow the traditional media to grow without being disrupted by digital competition. Whereas one may be tempted to conclude that India's growth in this sector is divergent from the world's, it will do well for Indian players to keep their eyes on changing landscape globally and prepare for its eventual impact on the Indian market."
Television (TV) subscription revenue is expected to grow at 11.6 per cent (global - 1.3 per cent) CAGR from Rs 52,755 crore in 2016 to Rs 90,713 crore in 2021. Though subscriber numbers are still growing, the report predicts that the explosive growth levels of the recent past will not be replicated in the future. While cable market is approaching a saturation point it will continue to account for over 55 per cent of the total pay-TV market in 2021. TV advertising will continue to hold the larger share of the pie from Rs 21,874 crore in 2016 to Rs 37,315 crore in 2021, growing at 11.1 per cent. Globally, TV advertising is expected to grow at 2.1 per cent for the forecast period.
India is ranked eighth in the Asia Pacific region in the internet advertising market. While the segment is growing faster than any other advertising platform at 18.6 CAGR it is still an immature online ad market due to lack of Internet access among Indians. Fixed broadband penetration remains low at 6.9 per cent in 2016. However, this is double the global growth, estimated at 9.8 per cent. Currently mobile Internet advertising comprises 27.6 per cent of total online spending, marking a clear gap between Indians with mobile access and brands reaching out to the mobile audience.
India's internet video segment revenue in 2016 was Rs 560 crore in 2016 and will grow at 22.4 per cent CAGR (global - 11.6 per cent)to reach Rs 1540 crore in 2021 according to the report. Going forward, transactional video-on-demand is expected to account for over 61 per cent of total Internet video revenues in 2021, with many households not wanting to commit to the regular payments of subscription video-on-demand. In other words, the content providers will see more traction by breaking content into snackable segments and charge only for those, rather than give only long format content. For example, people would be more willing to pay for the highlights of a cricket match than watch the whole match on a paid platform.
Box office revenue is expected from INR 10,957 Cr in 2016 to Rs 18,047 crore in 2021, at a healthy CAGR of 10.4 per cent. Globally, it is estimated that box office revenues will grow by 4.4 per cent CAGR with mature markets like the US already facing challenges while attracting footfalls to the cinema halls. In India, admissions will rise from an estimated 200 crore in 2016 to 230 Cr in 2021 (at a CAGR of 2.4 per cent) and ticket prices will rise at a CAGR of 7.9 per cent in the same period. This is one of the few major cinema markets in which 100 per cent digitisation of screens has not yet been achieved - and it is not expected to occur over the forecast period.
Publishing in India is expected to grow from Rs 38,601 crore in 2016 to Rs 44,391 crore in 2021 at a CAGR of 3.1 per cent. Book publishing is projected to grow at 6.1 per cent CAGR over 2017-2021 whereas magazines are expected to grow at a CAGR of 3.3 per cent for the same period. The Indian newspaper industry continues to grow from Rs 23,161 crore in 2016 to Rs 24,447 crore (1.1 per cent) in 2021, distinctly positive when compared to the segment's degrowth globally (2.7 per cent) predicted by PwC for the forecast period.

83% currency remonetised so far: RBI

Mumbai: Mr B P Kanungo, Deputy Governor of the RBI, has verified that over 82.7 per cent of the currency has already been remonetised so far, which is around 108 per cent in volume terms. The Government of India had demonetised old Rs 500 (US$ 7.76) and Rs 1,000 (US$ 15.51) notes on November 9, 2016, scrapping around 87 per cent of the currency in circulation. Mr Kanungo further stated that it would be wrong to assume that there is any shortage of currency in the system as RBI is monitoring the situation on a regular basis and has made enough arrangements to replenish cash. There were 17,165 million pieces of Rs 500 (US$ 7.76) notes and 6,858 million pieces of Rs 1,000 (US$ 15.51) notes in circulation in the country before the announcement of demonetisation in the country.

Home loans set to get cheaper as RBI eases norms for banks

Mumbai: The Reserve Bank of India (RBI) on Wednesday made it possible for banks to lend more to home buyers, and at lower interest rates, in a move that should benefit customers as well as real estate developers.
The central bank did this by reducing the amount of money banks have to set aside (as security) on home loans. Previously, they had to set aside 0.4%, or Rs400 per lakh. This has now been reduced to 0.25%, or Rs250 per lakh.
Combined with the cut in the statutory liquidity ratio (the portion of deposits which banks have to invest in government securities) by 50 basis points, or 0.5 percentage point, this means banks now have that much more capital to lend. The reduction in the amount banks have to set aside (also called a provision) also mean lower home loan rates.
The central bank also reduced the so-called risk weightage on home loans of between Rs30 lakh and Rs75 lakh to 35% from 50%, and over Rs75 lakh to 50% from 75%.
Risk weights are used to calculate the minimum amount of capital that must be held by banks to reduce the risk of insolvency.
This could make bigger home loans less expensive. (Typically, loans above Rs75 lakh were up to 0.5 percentage points more expensive, in terms of interest than other loans.)
“When risk weightage drops it means the banks have that much more money to lend. If it has dropped by one third it means the cost of doing business comes down which makes it possible for banks to then cut interest rate and pass it on to the borrowers,” said Rajeev Ahuja, chief operating officer, RBL Bank Ltd.
The reduction in rates will be higher for bigger ticket size loans which are already more expensive when compared to loans of lower value. Currently, the interest rate on home loans above Rs75 lakh is higher. For instance, State Bank of India offers an interest rate of 8.35% for loan amount below Rs30 lakh while for loan above Rs75 lakh the interest rate is at 8.65%.
RBI’s decision was prompted by an understanding of the multiplier effect of home loans, according to RBI deputy governor N.S. Vishwanathan. His reference is to the fact that an increase in home loans means more home sales, which will benefit real estate developers—and companies in the construction, cement and steel businesses at one end, and companies in the furniture and appliance businesses at another.
“Delinquencies (are) generally among the lowest in home loan segment....It has been decided to reduce risk weight on certain categories on home loans and also the standard asset provisioning,” Vishwanathan added.
According to Vishwanathan, reduction of statutory liquidity ratio (SLR) by 50 basis points will help banks in achieving 100% liquidity coverage ratio by January 2019. These two factors together will bring buoyancy to the home loan segment.
Credit to the housing segment has increased by 13.4% year-on-year at the end of April.
Banks are focusing on affordable housing as demand from other sectors of the economy has dried up and to take advantage of incentives offered by the government to home buyers. Many banks have reduced their home loan rates. The government on 31 December announced the Credit Linked Subsidy Scheme for Middle Income Groups, where interest subsidy of 4% was granted on housing loans of up to Rs 9 lakh and 3% on housing loans of up to Rs 12 lakh.
According to a report by CLSA India Pvt., housing sales could rise from Rs7 trillion in financial year 2017 to Rs17 trillion by fiscal 2024 on the back of market growth and impetus to affordable housing.
“The decision to reduce the risk weights for home loans over Rs30 lakh category will release capital for the banking industry and is a positive move,” said SBI chairman Arundhati Bhattacharya.
Banks have already been aggressively cutting home loan rates. SBI, for instance, has already cut its one-year marginal cost of funds based lending rate (MCLR) —the rate linked to its home loans—to 8% currently from 9.20% in April 2016.
Vivina Vishwanathan contributed to this story.

GO BACK Cabinet approves development of four laning from end of Pandoh bypass to Takoli section of National Highway (NH) - 21 in Himachal Pradesh

New Delhi: The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has given its approval for development of four laning from 'end of Pandoh Bypass to Takoli' section of National Highway (NH)-21 in Himachal Pradesh.
The cost is estimated to be Rs.2775.93 crore including cost of land acquisition, resettlement and rehabilitation and other pre-construction activities. The total length of the road to be developed is approximately 19 kms.
This work will be done under National Highways Development Project (NHDP) Phase IV B on Hybrid Annuity Mode.
The project will help in expediting the improvement of infrastructure in Himachal Pradesh and in reducing the time and cost of travel for traffic, particularly heavy traffic, plying between ‘end of Pandoh Bypass to Takoli' section. The development of this stretch will also help in uplifting the socio-economic condition of this region in the State.
It would also increase employment potential for local labourers for project activities. It has been estimated that a total number of 4,076 mandays are required for construction of one kilometre of highway. As such, employment potential of 77,000 (approx.) mandays will be generated locally during the construction period of this stretch.

Cabinet approves MoU between India and Korea for export credit of USD 9 billion

New Delhi: The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the proposed Memorandum of Understanding (MoU) between Export-Import Bank of India (EXIM Bank) and Export-Import Bank of Korea (KEXIM) for export credit of USD 9 billion for infrastructural development in India and for the supply of goods and services as part of projects in third countries.
The MoU is proposed to be signed between the two banks during the forthcoming visit of the Finance Minister Shri Arun Jaitley, to Seoul, Korea during 14-15 June 2017 for the Annual Financial Bilateral Dialogue. The decision is expected to promote the country’s international exports, and deepen political and financial ties between India and Korea. The export credit will be utilized through lending by EXIM Bank for promoting projects for priority sectors, including smart cities, railways, power generation and transmission etc., in India and for the supply of goods and services from India and Korea as part of projects in third countries.
Implementation Strategy
Under the implementation strategy, the parties to the MoU will hold mutual consultations to structure the financial assistance, review the existing arrangements and related procedures. EXIM Bank will identify viable projects in India. For projects in third countries, both parties will jointly identify viable projects. It is understood from EXIM Bank that the USD 9 billion would be extended by KEXIM by way of Investment Credit (typically export credit facility to finance projects with a certain level of Korean import content and interest rates as per OECD export credit guidelines). This amount may also be utilized by KEXIM as the financier without the participation of EXIM Bank subject to satisfaction of the purpose.
The supply of goods and services from India and Korea as part of projects in third countries will be an additional avenue which this MoU will enable. It will help in exchanging mutual experience, sharing information on financing export and import operations, project assessment and knowledge generated in respective fields of activities.
Background
The Joint Statement issued in 2015 during the visit of the Prime Minister to the Republic of Korea stated that Korea intends to offer USD 10 billion of infrastructural development in India. The package was subsequently prepared to comprise of USD 1 billion from the South Korean Economic Development Cooperation Fund (EDCF) as government to government funding and USD 9 billion as export credit from KEXIM. The credit of USD 9 billion from KEDIM is to be through a formal MoU to be signed between KEXIM and EXIM Bank.

Reebok seeks govt nod to open single brand retail stores in India

New Delhi: Reebok India has submitted a proposal to the Department of Industrial Policy and Promotion (DIPP), seeking Government of India's approval to open single brand retail stores in India. The company has applied through the '100 per cent foreign direct investment (FDI) in single brand retailing' route. Under this policy, 49 per cent FDI is allowed via the automatic route; however, beyond that limit, the company needs the government's approval. The investment is permitted only if the products are of a single brand and are sold under the same brand all over the world. Also, if the FDI proposal is for more than 51 per cent, it is compulsory for the company to source 30 per cent of the value of goods bought from India, preferably micro, small and medium enterprises (MSMEs). Currently, Germany-based Adidas AG sells both Adidas and Reebok sports shoes and clothes across India.

Finance Act 2017: ESOPs, FDI deals exempted from LTCG tax

New Delhi: The Central Board of Direct Taxes (CBDT) on Tuesday notified a series of exemptions to the anti-abuse provision introduced in the Finance Act 2017 to curtail money laundering through securities transactions.
The provision was aimed at preventing the misuse of long-term capital gains (LTCG) tax exemption through such transactions.
Relief given to genuine transactions is based on suggestions received after the CBDT, the apex direct tax policymaking body, brought out a draft notification in April. Tuesday’s announcement says the bona fide acquisition of securities on which the securities transaction tax (STT) is not paid, including employee stock options (ESOPs), foreign direct investment and court-approved transactions, will be exempt from LTCG tax.
Finance minister Arun Jaitley introduced amendments in the Income Tax Act this year to deny the LTCG exemption in all cases where STT is not paid, except the notified ones. The move was prompted by a recommendation by a Supreme Court-appointed special investigation team on black money that had highlighted the use of penny stocks in money laundering by inflating their price through market manipulation.
Tuesday’s notification says that when a listed firm’s shares are acquired outside the stock exchange and STT is not paid, LTCG tax is chargeable, except in cases such as acquisition of ESOPs, acquisitions as part of the government’s disinvestment programme and purchase of shares by non-residents in line with the foreign direct investment policy.
Also, where an off-market transaction is approved by the Supreme Court, the National Company Law Tribunal (NCLT), the Securities and Exchange Board of India (Sebi) or the Reserve Bank of India (RBI), the LTCG exemption is available even if STT is not paid. Investors prefer off-market purchases to avoid influencing the stock market.
The acquisition of shares under Sebi’s takeover code and off-market share purchases by venture capital funds and qualified institutional buyers are also exempt.
The exemptions are significant given the fact that many projects in stressed sectors could opt for bankruptcy proceedings in which lenders will explore various turnaround options including management and ownership change before considering liquidation and sale of physical assets.
The notification said that cases of acquiring infrequently traded listed securities via preferential issues will be subject to LTCG tax. Bona fide cases such as acquisitions made in line with orders by the apex court, NCLT, Sebi and RBI will be exempted. Other exemptions in this category include preferential issue of infrequently traded shares to non-residents, venture capital funds and qualified institutional buyers.
“This notification comes as a breather for foreign investors and venture capital houses as well as shareholders who have acquired shares upon corporate restructuring undertaken vide court-approved schemes on which no STT was paid. A crucial aspect that the final notification covers is granting of exemptions to taxpayers who have received shares in the course of employment (ESOPs),” said Abhishek Goenka, partner and leader, direct tax, PwC.

IMD upgrades monsoon forecast to 98% of long period average

New Delhi: Rainfall during the June-to-September southwest monsoon season will be normal this year, the India Meteorological Department (IMD) said on Tuesday, confirming its first forecast that was issued in April.
According to the latest update, monsoon rainfall will likely be 98% of the long-period, or 50-year, average (LPA) for the entire country, more than the 96% IMD had estimated in April.
Monsoon rainfall will be fairly distributed across the country, IMD director general K.J. Ramesh said, adding that while central India is likely to receive 100% of normal rains, peninsular India will likely receive 99%. North-west and north-east India are expected to receive 96% of the normal rainfall.
IMD said rainfall during July and August will likely be 96% and 99% of the LPA, respectively. There is a 65% probability that rains will be normal to excess for the entire country, it added.
The weather office has ruled out the possibility of any strong El Nino developing during the latter half of the monsoon, Ramesh said, adding that “in view of this positive development we have upgraded the monsoon forecast from 96% to 98%”.
His reference is to a weather phenomenon that causes warmer oceans in the equatorial Pacific region that is normally associated with a poor monsoon in the subcontinent.
IMD’s forecast of 98% rainfall comes with a model error of 4 percentage points (on either side). A monsoon is considered to be normal when total rainfall is between 96% and 104% of the LPA.
On 30 May, the monsoon hit the Kerala coast, two days before its usual onset date. After making landfall in Kerala, it advances to other parts of the country over June.
The timely onset and improved forecast of the monsoon, together with fairly even region-wise and month-wise distribution, augurs well for rain-fed kharif crops and food inflation, Aditi Nayar, principal economist at rating agency Icra Ltd, said in a statement.
“Following the record high growth of most crops in 2016-17, we expect that growth in agriculture will moderate to 3.5% in 2017-18,” she added.
The onset of the monsoon kick-starts the sowing season for summer crops in the country. India receives 70% of its annual rainfall during this period, which irrigates over half of its rain-fed croplands.
In 2016, the monsoon was normal at 97% of LPA after two consecutive years of deficit. The normal monsoon last year aided a rebound in agricultural growth to 4.9% (2016-17) after dismal 0.7% growth and 0.2% contraction seen in 2015-16 and 2014-15, respectively.
The normal rains in 2016 also led to record foodgrain production of an estimated 273 million tonnes in 2016-17, about 9% higher than a year earlier.
Evenly distributed and normal rains will ensure a good harvest and keep food prices low, said Ashok Gulati, agriculture chair professor at the Delhi-based Indian Council for Research in International Economic Relations. “The challenge will be to ensure that farmers get at least announced support prices and are not forced to sell (produce) at a loss due to a glut,” Gulati said.

Centre has cleared record Rs 67,523 crore for urban infra in Maharashtra: Venkaiah Naidu

Mumbai: The Narendra Modi government at the Centre has approved a total investment of Rs67,523 crore to improve urban infrastructure in Maharashtra in three years, Union minister for urban development, housing, and urban poverty alleviation Venkaiah Naidu said on Tuesday.
Naidu said this was the highest investment in urban infrastructure approved for any Indian state in three years of the Modi government. The investment approved for Maharashtra accounted for more than 15% of the total investment of Rs4.35 trillion in the country in three years, he said.
Naidu was addressing a press conference after a two-day review of urban infrastructure, affordable housing, and sanitation projects being implemented in the state with central assistance. Maharashtra chief minister Devendra Fadnavis was also present.
In these project approvals worth Rs67,523 crore, central assistance of Rs8,712 crore had been sanctioned to Maharashtra, he added.
The approved investments include Rs19,100 crore for seven smart cities in Maharashtra, the highest in any Indian state. “Around 218 projects are under implementation and tendering in Pune, Solapur, Kalyan-Dombivli, Nagpur, Nashik, Thane and Aurangabad which are among the 60 smart cities selected. All these seven cities are setting up integrated command and control centres to improve service delivery and Pune and Nagpur would become the first cities in the country on 25th of this month to actually operationalize such centres to mark the second anniversary of the ‘Smart City’ project,” Naidu said.
An investment of Rs20,100 crore has been approved for Nagpur and Pune metros which is 42% of the total investment of Rs48,000 crore approved for metro projects in the country in three years.
“In the next five to six years, Maharashtra would have operational metro projects with a total length of 360km spread over nine metro corridors. A total investment of Rs1.4 trillion would flow into these metro projects and increase the number of daily metro users to about 10 million per day,” Naidu said.

India is committed to transform the energy landscape of the country with significant clean energy share

New Delhi: India is committed to transform the energy landscape of the country with significant clean energy share, said Dr Harsh Vardhan, Union Minister of Science & Technology, Environment, Forest & Climate Change and Earth Sciences in his greeting speech on the occasion of Launch Ceremony of Mission Innovation Challenge on Smart Grids in Beijing today. Grid integration, stability and robustness are the foremost issues which need to be addressed for increasing the share of clean energy. The Minister congratulated all the Mission Innovation participant countries, who have come forward and decided to work together to take on this challenge collectively, engaging and involving, stake holders from industries, utilities, scientific institutions and research laboratories.
Dr. Harshvardhan said that under the visionary leadership of Prime Minister Shri Narendra Modi, India has mounted initiative to promote global actions for clean energy. President of France and Prime Minister of India in the presence of UN Secretary General launched International Solar Alliance (ISA) in November 2015 to provide dedicated platform for cooperation among solar resource rich countries beween ‘Tropic of Cancer’ and ‘Tropic of Capricorn’. Government of India has committed to a corpus fund of more than US $ 25 million besides providing space and secretariat expenses for initial 5 years. 31 countries have already joined ISA.
India was also one of the three countries, which took initiative in sowing the seed of ‘Mission Innovation’. These initial efforts culminated into 20 countries joining in November 2015 to launch Mission Innovation. All the MI countries bring significant research prowess and resources in this global endeavour. Community of Mission Innovation has now enlarged to 23 countries and includes European Union.
The laudable objectives of Mission Innovation needed instruments to realise the loftier goals. The Minister complimented sub-group on Action and Joint Research, who developed innovation challenges to convert these global calls into action. Innovation challenges cover entire spectrum of research, development and demonstration right from early stage research need assessment to technology demonstration. The spectrum of innovation challenges demonstrates the leading themes on which R&D need to be focussed for affordable innovation.
He expressed his happiness that innovation challenge on smart grids has developed its work programme smartly right from the early stage. This is the first MI team to organise the deep dive workshop. Development of the work plan as well as organisation of this workshop was done jointly by 3 leading research institutions and co-leads from each of the lead countries namely China, Italy and India. All the 20 participating countries have made significant contributions in terms of development of the status reports and identification of research and development priorities. International agencies such as IEA, IRENA, ISGAN, WEF etc. have further strengthened the programme .
Under the visionary leadership of Prime Minister Shri Narendra Modi, India’s plan of setting up 175 GW renewable power capacity by the end of 2022 is fully matched with tremendous progress on the ground. During the last year alone, the capacity addition of solar energy was more than the cumulative capacities set up till 2015 and our renewable energy capacity has leapfrogged to more than 52 GW. By 2030, non fossil energy sources will make up 40 percent of installed capacity.
India has vibrant national R&D infrastructure with R&D institutions, several universities, technical institutions, public sector undertakings and industries conducting research funded by Ministry of Power, Renewable Energy and Science & Technology. India has funded around US $ 50 million towards national as well as bilateral programmes with Netherlands, UK and US. India has also launched initiatives for renewable forecasting and scheduling, storage technologies, wide area grid measurement, demand response pilots etc. Monitoring, protection and control of grids, forecasting of generation and loads, seamless two way grid operations, systems for large data management, robust and secure communication technologies, devices and components for better functionality ,demand side management and storage, etc are important issues for larger as well as micro grids.
The Minister shared India’s report on research, development and demonstration on smart grids to further activities of this challenge and informed that India recently organised 1st MI India workshop of more than 40 top experts in the country representing all stakeholders at IIT- Delhi to identify R&D priorities for collaboration under Mission Innovation. He announced MI-India Funding Opportunity Announcement on these R&D priorities with an investment of US$5 million by Government of India.
He expressed hope that the collective endeavours would enable to realise the vision of an affordable, reliable future smart grids powered by decentralised energy sources which will be robust and suitable in diverse geographic conditions and would be able to develop technological solutions to make world a cleaner place.