Companies & Sectors
Indian media to be worth Rs1,457 billion by 2016: FICCI KPMG report

Digital film distribution has helped wider film releases and helped control costs in 2011. However, Reduced ad spends had resulted in a slower growth rate for both television and print

The Indian media and entertainment industry is expected to register a CAGR (compounded annual growth rate) of 15% to touch Rs1,457 billion by 2016, says the latest FICCI KPMG report. And there is a high possibility that this growth may come on the back of digital technologies.

According to Yash Chopra, veteran filmmaker and chairman of FICCI Entertainment Committee, “2011 was clearly the year where digital technologies began to deliver on their promise. Digital film distribution has helped wider film releases and helped control costs. In television, the digitization of cable will transform business models of all stakeholders and offer consumers more choice and convenience. Even as digital generates new opportunities, it also brings with it challenges that the industry must solve more urgently than anticipated.”

While television is still the dominant medium in this sector, gaming, digital advertising and animation are also steadily increasing their footprints. Animation, VFX, etc recorded a phenomenal growth of 31% and touched Rs31 billion in 2011. Online media or rather ‘new media’ also showed a spectacular growth of 40% over the earlier year.

The FICCI KPMG report says that in 2011, the media and entertainment (M&E) industry registered a growth of 12% over 2010 and touched Rs1,457 billon. Reduced ad spends had resulted in a slower growth rate for both television and print. Advertising spends across all media accounted for Rs300 billion in 2011, contributing to 41% of the overall M&E industry revenues. Advertising revenues witnessed a growth of 13% in 2011 as against 17% observed in 2010.

Television is estimated to be worth Rs329 billion in 2011, and is expected to grow at 17% CAGR, and touch Rs735 billion in 2016. Radio is also expected to register healthy growth on the back of Phase III auctions due this year. Print, the second most prominent player, grew 8.4% from Rs193 billion in 2010 to Rs209 billion in 2011.

The film industry is supposed to grow at 10.1% CAGR from Rs93 billion in 2010 to Rs150 billion in 2016. The music industry registered a 5% growth over the previous year and touched Rs9 billion in 2011. The outdoor media sector was hit the hardest by the economic turmoil and saw a growth of 7.6% in 2011 over 2010.

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Industrial growth rebounds to 6.8% in January

During the month, 13 out of 22 industry groups witnessed growth. Output of basic goods went up by meagre 1.6%, as against 7.7% in the year ago period. However, intermediate goods witnessed a contraction of 3.2%, as against 7.4% growth in January last year

New Delhi: Showing signs of recovery, industrial production gathered pace and grew 6.8% in January, over the previous month, mainly due to improvement in the manufacturing sector, reports PTI.

Growth in factory output growth, as measured by the Index of Industrial Production (IIP), was however higher at 7.5% in January 2011.

IIP growth for December has been revised upwards to 2.5% from the provisional estimates of 1.8%.

Output of the manufacturing sector, which constitutes over 75% of the index, rose 8.5% in January compared to 8.1% in the same month last year, according to the official data released on Monday.

Besides, output of consumer goods grew 20.2% in January, as compared to 8.3% in the same month last year. The production of the non-durable consumer goods segment has shown signs of improvement and grew by 42.1% in the month under review.

However the capital goods sector witnessed a contraction of 1.5%, as against a growth of 5.3% in the same month last year.

Mining output too contracted by 2.7% in January against 1.7% growth in the year ago period.

The power generation witnessed a slow growth of 3.2% in January, compared to 10.5% in the year ago period.

During the month, 13 out of 22 industry groups witnessed growth. Output of basic goods went up by meagre 1.6%, as against 7.7% in the year ago period. However, intermediate goods witnessed a contraction of 3.2%, as against 7.4% growth in January last year.

During the April-January period this fiscal, the IIP growth stood at 4%, as against 8.3% in same period in 2010-11.

Earlier last month, the Central Statistical Organisation (CSO) had estimated that the Indian economy would grow at a slower pace of 6.9% this fiscal, as against 8.4% in 2010-11.

The overall slow growth of IIP at 4% during the April-January period may prompt the Reserve Bank of India (RBI) to cut short term lending and borrowing rates in the mid-quarterly review of the monetary policy on Wednesday, especially in view of easing inflation, experts said.

Industry officials have blamed the slowdown in growth to the high interest rate regime that has made borrowings costly and curbed consumer spending.

Prime minister’s economic advisory panel chief C Rangarajan has said that the policy rate cuts by RBI would depend on inflation movement.

Overall inflation has started showing sign of cooling off as cheaper food items pulled it down to a 26-month low of 6.55% in January.

The apex bank in a surprise move had slashed Cash Reserve Ratio (CRR) from 5.5% to 4.75% on Friday, to infuse Rs48,000 crore to ease the liquidity crunch in the financial system.

RBI had last reduced CRR by 0.5 percentage point on 24th January as well, injecting Rs32,000 crore into the system.

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Economy to soon revert to 8-9% growth trajectory: President

The long term fundamentals of the Indian economy remain robust, president Pratibha Patil said, adding, “India’s growth prospects arise from factors such as high domestic savings and investment rates, favourable demographics, and a stable democratic polity”

New Delhi: The Indian economy will soon revert to the 8%-9% growth trajectory on the back of strong fundamentals and favourable domestic factors, reports PTI quoting president Pratibha Patil.

“My government is confident that it will soon steer the country back to the high growth trajectory of 8%-9%,” Ms Patil said while addressing the joint sitting of Parliament that heralds the beginning of the Budget Session.

As regards the current fiscal (2011-12), she said the growth will slow down to 7% from 8.4% in the last fiscal but “this remains a healthy growth given current global trends”.

The long term fundamentals of the Indian economy remain robust, she said, adding, “India’s growth prospects arise from factors such as high domestic savings and investment rates, favourable demographics, and a stable democratic polity.”

Referring to inflation which has remained a major challenge for the government, Ms Patil said the actions taken by the Reserve Bank of India (RBI) and the government have yielded results and “general inflation has ... eased”.

Recounting the steps taken to contain price rise, she said, “The government has taken several measures to ease the supply constraints, like reduction in import duties and a calibrated ban on exports. In order to ease the pressure of high international prices on fuels, custom duty on crude oil and import duty on petrol and diesel has been reduced.”

The economy grew at an average rate of more than 9% between 2005-06 and 2007-08. The growth rate fell to 6.7% in 2008-09 on account of global financial crisis, but recovered the momentum to 8.4% in 2009-10 and 2010-11.

Ms Patil said government would work to achieve economic security through rapid and broad-based development and creation of productive jobs and ensure energy security for our rapid growth.

She said the government will also strive to realise developmental goals without jeopardising ecological and environmental security.

Touching on economy, she said the current year has been a difficult one for world economy and uncertainties have had an adverse impact across the globe.

“There is increased political uncertainty and turbulence in the international system and the environment in which we operate has become more challenging over the last one year.

“Our economy grew at a handsome rate of 8.4% in 2010-11, but it has slowed down to about 7% this year.

This remains a healthy growth given current global trends,” Ms Patil said.

Asserting that the long-term fundamentals of the Indian economy remained robust, she said India’s growth prospects arise from factors such as high domestic savings and investment rates, favourable demographics, and a stable democratic polity.

“My government is confident that it will soon steer the country back to the high growth trajectory of 8% to 9%,” she said.

Maintaining that the government has remained committed to providing an honest and more efficient government, she said the government has taken several further important steps towards that end.

Ms Patil said a formidable and unprecedented array of Bills has been introduced in Parliament. These include Public Interest Disclosure and Protection of Persons Making the Disclosure Bill, Prevention of Bribery of Foreign Public Officials and Officials of Public International Organisations Bill, Citizens’ Right to Grievance Redress Bill, Judicial Standards and Accountability Bill and Lokpal and Lokayuktas Bill, she said.

India, she said, has also ratified UN Convention against Corruption.

“Together these have the potential of bringing about a transformational change in curbing corruption and enhancing transparency and accountability in governance. A comprehensive public procurement law is being formulated. The National Mission for Delivery of Justice and Legal Reforms has already been set up,” she said.

On black money, Ms Patil said, the government has initiated action on various fronts to tackle the menace.

These include enactment of the Benami Transactions (Prohibition) Act, amendment of the Prevention of Money Laundering Act, setting up of a special committee to examine measures to strengthen laws to curb black money generation in the country, and commissioning of studies by independent agencies to assess the quantum of black money both inside and outside the country.

“The framing of the General Anti-Avoidance Rules and Controlled Foreign Company Rules has been taken up under the proposed Direct Taxes Code. Efforts are underway to build political consensus on the Goods and Services Tax, which will give a major boost to the economy by rationalising indirect taxes and giving full input credit,” she said.

The president said the government was taking many steps to contain the generation and outflow of illicit funds from the country and for opening channels for getting wider information on black money from other countries.

These include the operationalisation of new Income Tax Overseas Units, signing of new Double Taxation Avoidance Agreements and new Tax Information Exchange Agreements and better implementation of Transfer Pricing and International Taxation provisions.

To underline inclusive growth, Ms Patil said, government will work for the early enactment of Land Acquisition, Rehabilitation and Resettlement Bill which provides for a liberal regime of compensation along with a mandatory rehabilitation and resettlement package, not only for land owners but also for those dependent on land for livelihood.

In the area of internal security, Ms Patil said, government has launched a number of measures towards development of areas affected by left wing extremism.

Asserting that the situation in the north-east and Jammu and Kashmir has shown considerable improvement during the last year, she said the government has shown that acts of violence can be contained with a firm but humane approach.

“My government has always been willing to enter into dialogue with any group willing to abjure the path of violence. It is encouraging that a number of organisations have come forward seeking resolution of their grievances in a peaceful manner,” she said.
Ms Patil said the government has signed a tripartite agreement for setting up of the Gorkhaland Territorial Administration.

“Another tripartite Memorandum of Settlement has been signed with United People’s Democratic Solidarity in Assam. A non-lapsable central pool of resources has been created to cover the gaps in funding requirements of central government projects in the north-east,” she said.

She also mentioned the Protocol on the Land Boundary Agreement between India and Bangladesh which paves the way for settlement of long standing issues and a mutually beneficial bilateral cooperation.

“My government also initiated steps for resettlement and rehabilitation of the internally displaced persons in Sri Lanka,” she said.

Noting that India has a vital stake in peace, stability and progress of the countries of West Asia and North Africa, she said, “We would like the people of the region to chart their own pathways to nation building and development at this historic time of transition and change. We are unwavering in our support to the Palestinian cause.”

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