Finance Minister Nirmala Sitharaman presented the Union Budget for the financial year 2024-25. Policy changes in the budget’s can go a long way in driving growth and development, making this announcement highly anticipated by industry professionals and job seekers alike.
While there were no direct announcements favouring the expansion of the AVGC (animation, VFX, gaming and comics) industry, there were some announcements that could indirectly influence the sector. The recent updates that could boost the development of the industry are as follows:
- Development of sports infrastructure in Bihar
The finance minister announced a budget of Rs 26,000 crore for road projects in Bihar, assuring that the government will establish sports infrastructure, airports and medical colleges in the state.
“For esports, focusing on enhancing sports infrastructure in Bihar is a positive step since the state has already shown its commitment to integrating esports into mainstream sports,” said Nodwin Gaming co-founder and managing director Akshat Rathee.
The Bihar State Sports Authority (BSSA) had organised its first ever State Esports Open Championship featuring titles like Battlegrounds Mobile India (BGMI), Real Cricket 24 and FIFA 23 at the Patliputra Indoor Stadium in Patna. The state had also opened a tender invite for the establishment of a project monitoring unit that promotes esports.
- Abolishment of angel tax in the startup ecosystem
In the interim budget announced in February, the government put forth a proposal to offer incentives for startups and investments by sovereign wealth or pension funds effective until March 2025.
As a follow up to the same update, the government has abolished angel tax for all classes of investors in the startup ecosystem. “Angel Tax” refers to a levy imposed on the capital raised by unlisted companies via shares to investors. Angel tax was introduced by the government in 2012 to prevent the inflow of unaccounted money.
CII’s Artificial Intelligence Task Force chairman, Indian Digital Gaming Society president, JetSynthesys founder and CEO, Rajan Navani commented, “The reduction in tax on long-term capital gains from the sale of shares of startups and unlisted entities by eight to nine per cent to 12.5 per cent is another significant advancement. Bringing this rate on par with listed shares achieves long-awaited parity and will massively increase domestic capital investment through family offices and venture funds in startups and new-age businesses.”
Said Rathee, “This move will create a vibrant environment for startups across the nation and is a major boost for Indian gaming and esports entrepreneurs, leading to more opportunities as well as higher engagement with the youth.”
“This [move] will give relief to more gaming and esports entrepreneurs who want to bring their innovative ideas to life, thereby strengthening the gaming and esports ecosystem in India. Overall, we are confident that these measures will propel India’s tech and video gaming industry, bringing India’s gaming culture forward,” said SuperGaming CEO and co-founder Roby John.
- Basics Customs Duty (BCD) on mobile phones reduced
The centre proposed a reduction in BCD for mobile phones, mobile PCBA (Printed Circuit Board Assembly) and phone chargers in the Union Budget for this financial year.
Sitharaman commented, “With a three-fold increase in domestic production and almost a 100-fold jump in exports of mobile phones in the last six years, the Indian mobile industry has matured. In the interest of consumers, I now propose to reduce the basic customs duty (BCD) on mobile phones, mobile PCBA, and mobile chargers to 15 per cent. To increase value addition in the domestic electronics industry, I propose to remove the BCD, subject to conditions, on oxygen-free copper for the manufacture of resistors. I also propose to exempt certain parts for the manufacture of connectors.”
Highlighted John, “The reduction in BCD on mobile phones is a move that will make smartphones more affordable, which is excellent news for India’s extensive mobile gaming community. For our upcoming game, Indus, and other games in the market, this means reaching a broader audience and accelerating growth in the mobile gaming sector.”
Rathee added that the move will boost mobile gaming adoption within the nation and further strengthen India’s position in the global mobile gaming market, “bringing us closer to becoming the largest.”
- Budget for education and skill development sectors
The budget has allocated Rs 1.48 lakh crore to the education, employment and skill development industry. This allocation is only 4.6 per cent of India’s GDP, falling short of the six per cent target recommended by the NEP (National Education Policy), said Ujjwal Chowdhury, who is secretary of Global Media Education Council and vice president at Washington University of Science and Technology.
Chowdhury noted that among the reductions, the budget for Indian Institutes of Technology (IITs) was reduced to Rs 10,324 crore. “Since 2014, the Narendra Modi-led administration has established 16 IIITs, seven Indian Institutes of Management (IIMs), 15 All India Institutes of Medical Sciences (AIIMS), and 390 universities, underscoring the government’s commitment to expanding higher education. Despite this growth, funding for these elite institutions has been cut back,” he said.
On the skill development front, the minister announced that over 1,000 industry training institutes will be updated with new outcome-oriented training content and design linked to industry skill requirements. Students pursuing higher education in domestic institutions will be eligible for loan assistance of Rs 10 lakh. A new scheme funded by the central government will launch in partnership with state governments and companies to train around 20 lakh youth for a five-year period. The centre will provide internships to one crore youths with every intern being provided a stipend of Rs 5,000 for the duration of a year, and a one time aid of Rs 6,000.
Mentioned Navani, “The new centrally sponsored skilling scheme, in collaboration with state governments and industries, is a significant advancement. By designing courses with industry input, the government ensures that our youth will emerge as seasoned professionals, ready for a rapidly evolving job market. This continuous upskilling approach aligns with the principle of a lifetime of careers, empowering individuals to adapt to technological advancements and industry shifts.
The gaming and esports industry has long advocated for youth upskilling, and it is encouraging to see the government align with this vision. A tech-savvy, skilled workforce is vital for these sectors, and the increased investment in education and skilling will undoubtedly equip young talent to excel.”
Despite some promising measures that could indirectly benefit the AVGC sector, the Union Budget 2024-25 was disappointing for the media and entertainment industry as a whole, with no direct announcements addressing its specific needs. Industry professionals hope that future budgets will recognise and support this important sector more robustly.
