Budget 2025: Arghya Chakravarty on driving growth in M&E

As India gears up for the 2025 Budget, industries across the country are eagerly awaiting measures that will fuel growth and innovation. In particular, the entertainment and media (M&E) sector is expecting the government to introduce policies that can accelerate its already robust growth trajectory.

Arghya Chakravarty, Chief Operating Officer of Shemaroo Entertainment Limited, shares his thoughts on what the M&E industry is hoping to see in the upcoming budget.

"The entertainment and media sector in India is experiencing significant growth, but there’s still immense potential for expansion. To sustain this momentum, we need policies that support infrastructure development, boost consumer demand, and incentivize technological advancements," says Chakravarty.

The Growth of India’s M&E Sector
In 2023, India’s M&E sector grew by 8%, reaching INR 2.3 trillion (US$27.9 billion), and it is expected to continue this growth at a 10% CAGR, reaching INR 3.1 trillion by 2026, according to FICCI-EY. Despite being the world’s fifth-largest M&E market, India’s contribution to the GDP from this sector remains under 1%, which highlights the significant opportunity for expansion.

To harness this potential, Chakravarty emphasizes the importance of prioritizing policies that foster both demand and supply within the sector.

1. Enhancing Consumption Demand
One of the major factors contributing to the growth of the M&E industry is the consumers’ willingness to spend on entertainment and leisure. Chakravarty believes that increasing disposable income is essential to spur demand and accelerate growth.

To achieve this, he suggests the following steps:

Reduce both indirect and direct tax burdens to boost disposable income.
Focus on employment generation by introducing programs that improve employability and create job opportunities.
2. Supporting the Advertising Sector
2024 was a challenging year for advertising, particularly for traditional platforms, which saw a 9% decline. The slowdown was attributed to rising inflation and lower consumption demand, which led to tighter marketing budgets for many advertisers.

Chakravarty stresses the need for the government to support the direct-to-consumer industries, which are major contributors to advertising revenues. By bolstering the health of these sectors, the government can help revive advertising spending.

3. Investment in Technology and Skillsets
The rise of AI, augmented reality (AR), and virtual reality (VR) is transforming the entertainment landscape. These technologies are driving personalized viewing experiences and immersive storytelling, enhancing content creation and consumption.

Chakravarty anticipates that the budget will include provisions for:

Subsidies and tax incentives to encourage the adoption of AI, AR, and VR technologies.
Partnerships with global tech leaders to ensure Indian entertainment companies remain competitive on the global stage.
Investments in skill development to equip the workforce with the necessary expertise to work with these cutting-edge technologies.
4. Providing Tax Incentives for Distributors
Exhibitors and DTH operators are facing challenges with declining footfalls and revenues. In particular, both sectors are affected by high GST rates of 18% for exhibitors and 28% for DTH services.

Chakravarty suggests that the government consider reducing these GST rates in the upcoming budget to support the growth of these sectors and provide much-needed relief.

Final Thoughts
As the Indian M&E sector continues its upward trajectory, there is a collective hope that the government’s 2025 Budget will include the right measures to ensure sustained growth. Chakravarty remains optimistic that the proposed policies will not only strengthen the sector but also position India as a global leader in entertainment and media.

"With the right fiscal measures, the M&E industry can unlock its full potential and make a more significant contribution to India’s GDP," concludes Chakravarty.