Interim budget aims to boost India’s gaming sector
Stakeholders in the gaming industry are hopeful that the interim budget will address their key concerns and provide strategic measures to boost the sector. Expectations include tax incentives for game development, infrastructure development, skill-building initiatives, export promotion benefits, strengthened regulatory frameworks, and campaigns promoting responsible gaming. The collective aim, according to marketers in the space, is to spur India’s gaming industry growth and global competitiveness.
Crucial priorities for the interim budget
However, economist Aruna Sharma points out that it’s crucial to recognize that this is an interim budget. Its primary purpose is to ensure the seamless continuation of committed initiatives until the new government takes over following the upcoming election. The focus is on preventing disruptions to ongoing projects, particularly in terms of salaries and other committed expenditures. Given this, the likelihood of ground-breaking initiatives is low. However, significant post-poll developments are possible. Moreover, the Ministry of Electronics and Information Technology is poised to codify rules for the sector’s self-regulatory body, and the Supreme Court’s proactive approach in consolidating cases is expected to persist during this period, Sharma added.
Hope for future developments in gaming sector
In the past year, the government has showcased consistent support for the country’s esports industry, laying a strong foundation for the sector’s growth. Stakeholders expect this trend to continue this year and remain optimistic about the upcoming budget. “To ensure the long-term success of our esports athletes and attract more aspiring players to pursue careers in esports, we also hope for tax relief for athletes on winnings from esports tournaments. ESFI will remain committed to working closely with the government to further elevate the status of esports in the country,” said Lokesh Suji, director of the Esports Federation of India (ESFI) and vice president of the Asian Esports Federation. Suji added that the hope is for the dedicated allocation of funds for the sector to establish the necessary infrastructure for the industry’s development and to nurture an ecosystem that positions India as a global esports hub.
Industry’s wishlist for the interim budget
Additionally, the industry anticipates the introduction of incentives for Indian video game development studios that will not only encourage innovation but also enable homegrown titles to prosper within the community. “We earnestly suggest the allocation of funds to each state government for the organization and promotion of state esports championships. This collaborative effort with prominent esports organizations at the state level, starting from the school level to the national level, will undoubtedly contribute to the organic growth of esports across the nation,” said K R Rohith, CEO of Gods Reign, an esports organization based in Bengaluru. Moving the sector to a lower slab of goods and services tax is also a hit-ticket demand. “From Budget 2024, one of the major steps I look forward to is more esports-based activities moving to the 18 percent slab from the present 28 percent,” said Rohit Agarwal, founder, and director of Alpha Zegus, a marketing agency specializing in gaming. Agarwal is also looking forward to the government encouraging more state governments to assign budgets for the growth and promotion of esports, something along the lines of what Bihar did for hockey recently.
Impact of budget on the gaming industry’s growth
The Indian gaming industry achieved a staggering turnover of $3.1 billion in fiscal 2023. Gaming-focused fund Lumikai’s recent report projected this soaring to $7.5 billion by fiscal 2028. Driving this rise are the dynamics of in-app purchases and ad revenues, anticipated to be the mainstay contributors to the industry’s growth, the report said. The AVGC-XR (animation, visual effects, gaming, and extended virtual reality) task force’s report and subsequent rollout of state-based model policies hold immense potential in the space. Suhas Khullar, chief financial officer at esports and live game streaming platform Loco, said they anticipate efficient implementation of the task force’s recommendations, particularly the establishment of skill development programs, to bridge the gap between India’s massive gamer base and its nascent content creation and game development capabilities. “We eagerly await the upcoming budget, anticipating dedicated allocations for skill development and tax incentives specifically designed for the AVGC sector. Such fiscal support will serve as a crucial catalyst for fulfilling the vision of ‘Create in India’,” Khullar said.
Analyst comment
Positive news: The interim budget aims to boost India’s gaming sector by addressing key concerns and providing strategic measures, including tax incentives, infrastructure development, skill-building initiatives, and export promotion benefits. This is expected to spur growth and global competitiveness. However, as an interim budget, ground-breaking initiatives are unlikely, but significant post-poll developments are possible. Industry stakeholders hope for continued government support and allocation of funds for infrastructure and esports development. The gaming industry’s growth is projected to reach $7.5 billion by fiscal 2028, driven by in-app purchases and ad revenues. Efficient implementation of the AVGC-XR task force’s recommendations and dedicated allocations for skill development and tax incentives are eagerly awaited. Overall, the budget is expected to have a positive impact on the gaming industry’s growth and development.
