foothold in the present, eyes on the future

1Copyright © 2018 The Nielsen Company

FOOTHOLD IN THEPRESENT, EYES ONTHE FUTUREBUDGET 2018 - THE NIELSEN VIEW

Copyright © 2018 The Nielsen Company

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CONTENTSFOOTHOLD IN THE PRESENT, EYES ON THE FUTURE....03THE AUTOMOBILE SECTOR..................................................05FAST MOVING CONSUMER GOODS....................................09FINANCIAL SERVICES.............................................................14INFORMATION TECHNOLOGY...............................................18INFRASTRUCTURE..................................................................20MEDIA AND ENTERTAINMENT.............................................22THE RETAIL SECTOR...............................................................25AGRICULTURE..........................................................................28TELECOMMUNICATIONS........................................................31


FOOTHOLD IN THE PRESENT, EYES ON THE FUTUREAll hopes traditionally ride high on the budget, and this one being thelast full budget announcement before the nation goes into the 2019general elections, made expectations rise a notch higher. While it isimpossible to make everyone happy, the government delivered onsome key themes and fell short on some others. Inclusion remains aconsistent area of focus for the government as the Finance Ministerlaid emphasis on rural development, healthcare, job-creation andinfrastructure.

Getting closer to our welfare goals

A high-decibel announcement and a significant boost towardssafeguarding farmers was the promise of increasing the minimumsupport price (MSP) for crops to 1.5 times the cost of production. Whilethere are concerns that this might cause inflation to rise consi derably,experts predict that the connection between the two is weak.

On the healthcare front, the centre announced an ambitious healthprotection scheme with an allocation of INR 2000 crores and an aimof covering 10 crore families in need. If this takes shape, it will be thelargest health protection programme in the world and an immensestep towards strengthening rural India. The announcement was shorton executional details, making critics ask some stern questions, but thevery attempt towards universal health coverage for a country as largeand diverse as India is a leap in the right direction.

Infrastructure development has long been a priority for the governmentand this year’s budget lived up to the expectations of the industry.Calling it a ‘growth driver’, Finance Minister Arun Jaitley announced theallocation of INR 5.97 lakh crores towards infrastructure spending, upby one lakh crore from the ongoing year. Focused development willhave positive ramifications on connectivity, job creation and the digitalinitiative, making it one of the highlight announcements of budget 2018.

PRASUN BASU PRESIDENT, SOUTH ASIA, NIELSEN

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Close, but not quite there

The middle class comprising mostly salaried folk, and the corporatesector were left more than a little disappointed as very few initiativescame their way, and several key concerns of the cohort were leftunaddressed.

Encouragingly, the reduction of corporate tax rate to 25% was a benefitthat has now been extended to companies with a turnover of up to INR250 crores. This announcement is massive primarily because it coversabout 99% of companies that file their tax returns.

Unfortunately, that’s all there was to cheer for. On an individuallevel, there was no change in either income tax rates or slabs. There-introduction of the abolished standard deduction for salariedindividuals offered some relief, but got watered down by a marginallyhigher education cess on the amount of income tax payable.

Another dampener was the re-introduction of the Long Term CapitalGains tax (LTCG) on stocks for a period of one year. So for middle class Indians saving up for their children’s education, for example, this spells bad news if their LTCG is above INR 1 lakh in a financial year. Additionally,investors will now have to shell out 10% tax on distributed incomefrom equity mutual funds. Considering the fast-growing popularity ofmutual funds among consumers in the last year, this announcement isexpected to put the brakes on this particular source of funds into thestock markets.

The Finance Minister is confident that staying on track on the fiscaldeficit target will be made easier with the implementation of the antievasion methods built into the new indirect tax system – the Goodsand Services Tax (GST). Budget 2018 has seen the revision of the fiscaldeficit target to 3.5% of Gross Domestic Product (GDP) for the current year, from 3.2%, possibly a rub-off impact of the GST implementation. Despite the assurances from the centre, there is a cloud of doubt hanging over the 3.3% fiscal deficit target, as the general opinion is that it may be difficult to keep it down to the projected figure.

On the back of a revival in growth of the manufacturing sector and agrowth of more than 8% in the services sector, Finance Minister ArunJaitley said in his budget speech that India is well on its way to becomingthe fifth largest economy in the world from its current seventh position.The big question that remains at the end of the budget announcementsis whether all the measures announced are enough to propel India toover 8% growth in GDP.


THE AUTOMOBILE SECTORIn the industrial landscape, the role of the automobile sector is a significant one with impressive numbers. The industry contributes 7.1% to India’s GDP and provides 32 million individuals with employment; figures that substantiate the industry’s reputation.

Nevertheless, budget 2018 did not meet the expectations of auto titans who were awaiting better news. Disappointingly, no momentous boost was given to electric vehicles (EV), a matter of high anticipation for those waiting on the wheels to turn on the product.

Simultaneously, in a move to push for local auto ancillary units, an increase on customs duty levied on auto components was announced. But a sigh of relief was heaved by establishments as the corporate tax for companies with a revenue of up to INR 250 crores, previously charged at 30%, was slashed down to 25% in this year’s budget announcement. Also on the brighter side, there is a highway to look forward to in the development front which is predicted to be 35,000 km long and will come at the price of INR 5,35,000 crores.

NO IMMEDIATE ACTION ON ELECTRIC VEHICLES Although the impetus to further India’s Electric Vehicle 2030 mission was much awaited, the government passed on the opportunity. Automotive Associations were eagerly awaiting support through the rationalisation of the GST rate, currently at 15% for EV and 28% for EV batteries. But the speech did not include the expected incentives.

There is a possibility that the government is focusing on creating a suitable ecosystem for EVs as opposed to pushing sales. The allocation of INR 16,000 crores towards the endeavour of rural electrification can back this possibility. The electrification can bolster the development of the ecosystem required for EVs, aiding the cause of EVs in the long run.

SANDEEP PANDE DIRECTOR, NIELSEN INDIA

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AUTOMOTIVE ASSOCIATIONS WERE EAGERLY AWAITING SUPPORT THROUGH THE RATIONALISATION OF THE GST RATE, CURRENTLY AT 15% FOR EV AND 28% FOR EV BATTERIES. BUT THE SPEECH DID NOT INCLUDE THE EXPECTED INCENTIVES.

INFRASTRUCTURE DEVELOPMENT The connectivity issue in the country requires a generous monetary figure to resolve; an investment allocation of INR 50 lakh crores can spur the GDP and increase connectivity substantially. But currently, budget 2018 has seen only an investment of INR 5.97 lakh crores made to the cause. As a first step, this will adequately enable the construction of the highways under the Bharat Mala project that is presently totalled at a length of 35,000 km. Along with employment and the development of infrastructure, this project also hints at a higher demand for commercial vehicles and construction equipment as a consequence of the highways.

INDIRECT IMPACT – PUSHING RURAL AND AGRICULTURE SECTOR GROWTH This year’s budget has reiterated its focus on the rural and agricultural sector by facilitating increased rural incomes. With a vision of doubling farm income by 2022, the government has optimistically invested in agricultural growth.

With the zeal to better farm income, the government has also announced a fixed MSP at a 1.5 times the cost of production. This news is predicted to have a positive impact on the sale of tractors, two wheelers and utility vehicles.

WITH THE ZEAL TO BETTER FARM INCOME, THE GOVERNMENT HAS ALSO ANNOUNCED A FIXED MSP AT A 1.5 TIMES THE COST OF PRODUCTION.


SUPPORT FOR MICRO, SMALL AND MEDIUM ENTERPRISES (MSME) The aforementioned reduction in the corporate tax, fallen to a more convenient 25% from a 30%, being offered to companies whose revenues do not exceed INR 250 crores is welcome news for the industry. This is especially thrilling for the sector because more than 80% companies engaged in auto component manufacturing are small and medium sized enterprises.

PROMOTE LOCAL In an effort to show its solidarity with the local auto component industry, the government moved to increase the import duty on select categories of automotive components. The steep upwards trajectory of import duty, now risen to 15%, will also cause an upsurge in competition and consequently, in productivity among those in the local industry.

This demonstrates the government’s support for the Make in India programme in relation to the automotive industry while simultaneously promoting indigenisation in the market.

LUXURY CARS AND BIKES TO GET EXPENSIVE Arun Jaitley proposed raising the customs duty on vehicles that aren’t entirely made in India. As a direct result of this, locally assembled vehicles from foreign carmakers are sure to become pricier.

Both cars and motorcycles are often imported to India through kits and assembled locally. But with the sharp 15% rise of the customs duty, from the current 10%, automobile luxury is at the cusp of becoming a costlier affair. Those with dedicated assembly facilities in India will be most affected.

An additional increase on the customs duty, albeit marginal, will be caused by a 10% Social Welfare Surcharge which will come as a replacement of the current 3% education and higher education cess impacting importers’ wallets.

ARUN JAITLEY PROPOSED RAISING THE CUSTOMS DUTY ON VEHICLES THAT AREN’T ENTIRELY MADE IN INDIA. AS A DIRECT RESULT OF THIS, LOCALLY ASSEMBLED VEHICLES FROM FOREIGN CARMAKERS ARE SURE TO BECOME PRICIER.

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NIELSEN VIEW The budget let down several expectations of the automobile industry. Support for research and development along with EV did not find a spot on the budget speech, disappointing the industry.

On a positive note, the core of the Indian economy – rural agriculture, infrastructure, and small and medium sized businesses seemed to win during this intense session. This win is bound to translate into demand for the Indian automotive sector.

The emphasis on localisation through various tax implementations will also benefit the automotive and supplier industry, leading to a brighter future for local businesses.

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FAST MOVING CONSUMER GOODSWith a towering figure of 1.3 billion people, India is one of the largest consumer markets in the world. Along with lower per capita fast moving consumer goods (FMCG) consumption as compared to that of our neighbours in South East Asia, there is sizeable headroom (refer chart below) for the growth of the FMCG industry in the country.

Compound annual growth rate (CAGR) of consumer spends in India between 2013 and 2016 was 12%, however the branded FMCG industry trailed at 8% growth in the same time period. The FMCG industry bounced back in 2017 with 13.8% nominal growth, riding on low base of 2016, good monsoon in 2016 and 2017, low inflation and buoyant GDP. On the other hand, contribution of domestic consumption in India’s GDP rose gradually from 56% in 2012 to 59% in 2017. The rising figure of consumption growth is closely tied to retail credit - the ratio of retail credit to GDP rose to an impressive 16% in 2017 from a mere 13% in 2012.

While the consumption growth rate over the past five years was 13.6%, lifestyle-related products such as electronic gadgets grew at higher double digits.

SAMEER SHUKLA EXECUTIVE DIRECTOR, NIELSEN INDIA

INDIAINDONESIA

THAILAND CHINAPHILLIPINES

$156$367

$29$56

$117

CPG AS A % OF GDP FMCG CONSUMPTION PER CAPITA ACROSS EMERGING PEERS

6%

5%4%

4%2%

2%URBAN $64RURAL $14INDIA

INDONESIAUS

THAILANDCHINA

PHILLIPINES

Source: Nielsen estimates

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WHILE THE CONSUMPTION GROWTH RATE OVER PAST FIVE YEARS WAS 13.6%, LIFESTYLE-RELATED PRODUCTS SUCH AS ELECTRONIC GADGETS ARE GROWING AT HIGHER DOUBLE DIGITS.

These trends indicate that we are at a crucial moment for the industry as the market stands at a decisive intersection between positive developments and areas of scepticism. Job creation is are at a 12-year low, non-performing assets at an all-time high, private investments are muted, and the gross fixed capital formation rates have sharply fallen from a 35% level in 2007 to 26% now. Also, scraping the bottom with an 18 year low, household savings are currently accounting for only 18.5% of the GDP.

CHIEF ECONOMIC ADVISER TO GOVERNMENT OF INDIA, ARVIND SUBRAMANIAN’S OPINION THAT THE INVESTMENT SLOWDOWN IS MORE TENACIOUS A CRISIS THAN THE SAVINGS SLOWDOWN IS BACKED BY THE ECONOMIC SURVEY WHICH FURTHER ADDS THAT A 1% FALL IN THE INVESTMENT RATE CAN DAMAGE GDP GROWTH BY 0.4% TO A STAGGERING 0.7%.

Meanwhile, the Nielsen consumer confidence index (CCI) for Q4 2017 shows that India remains as the most confident country – out of 60 odd countries that Nielsen measures every quarter. Yet, insights into what people are worried about reveal that Indians are primarily concerned about their health and work-life balance, along with other concerns around local economy, global warming and job security.

Amidst economic upheavals – with the highlights of demonetisation of high denomination currency and roll out of GST, the Indian consumption story has seen ups and downs in recent quarters.

As GST council had already mandated new tax rates for goods and services starting July 2017 and few amendments subsequently, unlike earlier budgets the price ups and downs of FMCG product categories with budget announcement is now passé. However, current macro-economic environment is poised to fuel consumption growth and the announcements in budget 2018 pertaining to the increased MSP, larger planned investments in the agricultural sector, focus on the small and medium sized enterprises (SME) through lowering of tax rate and an increased customs duty lend to the notion that the FMCG landscape will change considerably.


AGRICULTURAL THRUST This budget has showered its attention on the agricultural sector and FMCG will feel the sprinkle too. The rise in the MSP and agricultural credit will improve rural income. Along with increased funding towards the Krishi Sinchayee Yojana and the doubled allocation of funds towards the food processing industry, the announcements that will boost rural development shall help drive FMCG consumption in the hinterland.

FMCG MARKET PERFORMANCE VS. MSP PRICES (YOY)

Source: Money control, Reuters and Ace Equity

JAN-07

60%50%40%30%20%10%0%

-10%-20%-30%-40%-50%

JAN-09 JAN-14JAN-11 JAN-16JAN-08 JAN-13JAN-10 JAN-15JAN-12 JAN-17 JAN-18

BSE FMCG VS. SENSEX PADDY MSP WHEAT MSP

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Source: http://www.indiabudget.gov.in

INFRASTRUCTURAL THRUST The budgets have laid substantial thrust on infrastructure – this would strike gold for FMCG companies, agricultural products, banking, tractors and two wheelers. The ones specifically accelerating growth for the above beneficiaries are announcements such as the regional connectivity scheme for airlines, increased allocation towards railways, road sector allocation, smart cities execution and affordable housing.

LOWERED CORPORATE TAX FOR SMES A major development during this fiscal year is the lowered corporate tax for SMEs since it will specifically rejuvenate the textile and leather industries. It will make way for a digital thrust, and give hope to start-ups especially in light of the extension of the three year tax free scheme now available till 2021. These budget benefits will also lead to more jobs for the people.

CUSTOMS DUTY INCREASE The increment in customs duty will have severe after effects on the FMCG sphere, with new prices to be unveiled soon. For example, edible oil prices can be expected to move up as much as 70% since the industry heavily relies on imports. With the consumption narrative and its climax depending on gadgets and lifestyle products, increase in customs duty is likely to cost consumers dearly. Other products affected will be personal care goods, watches, clocks, diamonds, gemstones and edible oils.

SUBSTANTIAL PUSH IN AGRICULTURAL ALLIED SECTORS

BUDGET FY 18-19(RS CRORE) 2015-16 (A) 2016-17 (A) 2017-18 (RE) 2018-19 (BE) YOY CAGR

(2015-19E)

Green Revolution 9777 10105 11185 13909 24% 12%

White Revolution (Dairy) 937 1309 1633 2220 36% 33%

Blue Revolution (Aquaculture)

200 388 302 643 113% 48%

WITH THE CONSUMPTION NARRATIVE AND ITS CLIMAX DEPENDING ON GADGETS AND LIFESTYLE PRODUCTS, INCREASE IN CUSTOMS DUTY IS LIKELY TO COST CONSUMERS DEARLY.


NATIONAL HEALTH PROTECTION SCHEME This scheme was one of the most high-decibel announcements this budget session. The scheme is determined to improve affordable health care. Despite Rashtriya Swasthya Bima Yojana (RSBY), National Sample Survey Office data points out that out-of-pocket (OOP) expenses have been on the rise in recent years among the poorer sections. This inconvenient rising figure is owed to the fact that 65% of OOP expenses are spent for outpatient treatment, this is outside the scope of RSBY. It is now down to regulation to ensure that insurance does not lead to overcharging and medical malpractices, rendering the cover ineffective. Potential positive outcomes of efficient regulation can be a decline in medical malpractices and an increase in disposable income for the masses. Health care programs can be excellently effective when the public health infrastructure is well developed. Overall the scheme exudes a sense of a brighter future, for consumption and for overall development.

POTENTIAL POSITIVE OUTCOMES OF EFFICIENT REGULATION CAN BE A DECLINE IN MEDICAL MALPRACTICES AND AN INCREASE IN DISPOSABLE INCOME FOR THE MASSES.

NIELSEN VIEW India’s chief economic advisor has made it abundantly clear that the investment slowdown is taking the economy down with it. While it needs to be immediately remedied, India’s economic numbers are shifting sporadically at the moment. Hope has resurfaced after the budget announcements and consumption is poised to do better than before.

The budget impressed upon the rural sector significantly, leaving the populace to expect a rising disposable income for the sector. As a result, FMCG companies can be expected to focus more on the rural sector. Already, the top 10% of villages account for 50% of rural FMCG sales. This market is about to erupt even further, guaranteeing amplified consumption.

The role of infrastructural networks is critical for fuelling consumption growth, making the announcements in relevance to infrastructure specifically valuable to the FMCG sector. The better prospects unveiled in the budget hint at a risen consumption owing to superior connectivity.

Increased customs duty will definitely have an impact on consumption, with prices currently in flux and import seeming like a less reliable method. Specific goods are likely to be more expensive in the near future.

Overall the FMCG sector is going to be largely affected by announcements made in pertinence to other sectors. The trickle-down effect is going to determine the future of consumption and the revenue it will generate.

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FINANCIAL SERVICESBased on the recent state election results, it is no surprise that the focus remains on the rural sector. The Non Democratic Alliance government has lost ground and as a result, the rural majority of India is up front and centre in this budget session. This year, prior to the highly anticipated national elections, the attention has been fixated on rural development and agriculture.

In terms of predictions, the economy is productively expected to hit 8% growth rate towards the end of the year. However, to accommodate higher demand for expenditure, the fiscal deficit target for 2018-19 has been set at 3.3% of the GDP as opposed to the earlier target of 3%.

TAXATION While revisions were made to the income tax rates last year, they’ve remained unchanged this year. However, an upwards revision was made to the education cess which has now risen from 3% to 4% and is currently called the health and education cess. Encouragingly, senior citizens have been given several avenues to save taxes through the revisions made in the budget.

The Pradhan Mantri Vaya Vandana Yojana, a scheme that caters to India’s aging population, has been extended to March, 2020. Simultaneously, the current investment limit for senior citizens that stands at INR 7.5 lakhs has been increased to INR 15 lakhs. Moreover, under section 80D, the deduction limit for health insurance premium and/or medical expenditure has been raised from INR 30,000 to INR 50,000 for senior citizens. Consistent with the theme of increments, exemption of interest income on deposits with banks and post offices has been increased from INR 10,000 to INR 50,000.

While the salaried class did not receive any relief as a result of this year’s budget, the revisions have taken a turn in the favour of the elderly.

BANKING In a monumental pre-budget announcement, the government had detailed out its plan to help public sector banks (PSBs) that are struggling with the significant brunt of non-performing assets (NPAs). The infusion plan, that is part of the recapitalisation plan rolled out to help PSBs, includes INR 80,000 crores through bonds and INR 8,139 crores in the form of budgetary support.

DEVBRAT KUMAR DIRECTOR, NIELSEN INDIA


The capital infusion for the PSBs has been tied to performance in a move that progresses the financial welfare of individuals. The recapitalisation and reform agenda dictates that the PSBs make a commitment to providing banking services within five kilometres of every village. Furthermore, other conditions to be fulfilled by the PSBs such as a refund provided within ten days of any unauthorised debit in electronic transactions, a mobile app designed to locate banking outlets, and a mobile ATM in every under-served district also further the cause of financial welfare specifically in rural areas.

IN A MONUMENTAL PRE-BUDGET ANNOUNCEMENT, THE GOVERNMENT HAD DETAILED OUT ITS PLAN TO HELP PUBLIC SECTOR BANKS (PSBS) THAT ARE STRUGGLING WITH THE SIGNIFICANT BRUNT OF NON-PERFORMING ASSETS (NPAS).

INSURANCE Believed to be the world’s largest health protection scheme, it is no wonder that the announcement of the National Health Protection Scheme (NHPS) was deemed as perhaps the most crucial announcement of Union Budget 2018. The NHPS would cover 10 crore poor families and 50 crore beneficiaries up to the value of INR 5 lakhs per annum.

The education cess levied on individuals which has now been raised to 4% from the previously lower figure of 3% is slated to generate additional revenue to partially fund the NHPS. The NHPS presents huge opportunity for health insurance companies.

For the fiscal year of 2018-2019, the government has set a divestment target for itself of INR 80,000 crores. As a route to achieving this figure, three public sector insurance companies- The Oriental Insurance Co. Ltd, National Insurance Co. Ltd, and United India Insurance Co. Ltd will be merged into a single insurance company and listed in exchanges.

The aim of the merger is to eliminate competition between the three companies in an effort to streamline processes. Other benefits of the merger will be reduced marketing expenses and increased cost efficiencies. This is likely to benefit the insurance customers both in terms of pricing and service experience.

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BELIEVED TO BE THE WORLD’S LARGEST HEALTH PROTECTION SCHEME, IT IS NO WONDER THAT THE ANNOUNCEMENT OF THE NATIONAL HEALTH PROTECTION SCHEME (NHPS) WAS DEEMED AS PERHAPS THE MOST CRUCIAL ANNOUNCEMENT OF UNION BUDGET 2018. THE NHPS WOULD COVER 10 CRORE POOR FAMILIES AND 50 CRORE BENEFICIARIES UP TO THE VALUE OF INR 5 LAKHS PER ANNUM.

MUTUAL FUNDS/EQUITY MARKETFor those investing in mutual funds or directly in equities, the announcement of a 10% tax levied on LTCG has been disappointing. The announcement has resulted in massive selling and a continued sharp fall in market indices. High riding mutual funds with a reputation of a long run with positive market returns are therefore now staggering when faced with investors. Attracting customers will not be the cakewalk it once was for mutual funds.

FOR THOSE INVESTING IN MUTUAL FUNDS OR DIRECTLY IN EQUITIES, THE ANNOUNCEMENT OF A 10% TAX LEVIED ON LTCG HAS BEEN DISAPPOINTING. THE ANNOUNCEMENT HAS RESULTED IN MASSIVE SELLING AND A CONTINUED SHARP FALL IN MARKET INDICES.


PROMOTING FINTECH FOR MSME LENDINGThis budget provided recognition to the role of online Fintech lending companies. It’s become increasingly apparent that they are vital in providing working capital to MSMEs. The government has expressed its intention to find ways to help the growth of Fintech companies. For the same purpose, a group of experts will come together under the finance ministry to analyse and better understand how this growth can be accelerated.

The initiative is likely to help Fintech companies access cheaper funds to lend to consumers while making consumer on-boarding an easier process.

NIELSEN VIEW Owing to the fact that the general election is looming above the budget, the focus has been maintained on the rural economy, infrastructure and agriculture in the 2018 budget.

The budget has definitely benefited senior citizens but hasn’t done much in terms of easing the fiscal burden on the salaried class. Converse to that effect, the additional 1% cess has only alarmed the salaried and hopeful.

The proposal to utilise Jan Dhan accounts to provide insurance and pension to the poor, and the increase in exempted interest income on deposits for senior citizens, are likely to add to the deposit base of banks.

The proposed NHPC has been the highlight of the 2018 budget. It is likely to benefit as many as 50 crore individuals. The scheme will not only help improve the penetration of insurance among the masses but will also provide a positive growth momentum to the health insurance companies in the country.

The banking sector was not as largely impacted by the budget. But on the basis of the recapitalisation plan for PSBs, the budget laid down an expectation of incremental loans of INR 5 lakh crores.

The AUM (Asset under Management) of Mutual funds by retail investors has been experiencing an average year on year growth of more than 30% but the imposition of LTCG tax has for the time resulted in a negative reaction in the stock markets. The only thing to be done in this respect is to wait and watch which way the fiscal pendulum swings.

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INFORMATION TECHNOLOGYThe cash shortage in the wake of the November 2016 Demonetisation drive drove up digital adoption, and particularly digital modes of payment, overnight. This had a profound effect on the information technology (IT) sector. To add to all the action in the sector, the Union Budget 2018 saw a spate of announcements around digital initiatives and infrastructure.

DIGITAL AND RURAL CONNECTIVITY Budget 2018 announcements continued to drive the long-term digital focus of the government, with rural infrastructure and connectivity being key areas. The aim is for 1.5 lakh gram panchayats to be connected by optic fibre and five lakh Wi-Fi hotspots to be created in villages. Digi Gaon, which is an earlier initiative, has been kept alive in the budget agenda this year too. However, implementation will be mission-critical for all these initiatives to have the envisaged effect. The last year has made it painfully evident that a lot of earlier digital initiatives have failed to realise their full intended potential because of the gap between intention and implementation.

BUDGET ANNOUNCEMENTS CONTINUED TO DRIVE THE LONG-TERM DIGITAL FOCUS OF THE GOVERNMENT, WITH RURAL INFRASTRUCTURE AND CONNECTIVITY BEING KEY AREAS. THE AIM IS FOR 1.5 LAKH GRAM PANCHAYATS TO BE CONNECTED BY OPTIC FIBRE AND FIVE LAKH WI-FI HOTSPOTS TO BE CREATED IN VILLAGES

ABHIJIT MATKAR DIRECTOR, NIELSEN INDIA


DIGITAL INDIA The allocation towards ‘Digital India’ has been doubled to INR 3073 crores reflecting exactly how serious the centre is about accomplishing their mission. The announcement to have every single railway station connected by Wi-Fi and close-circuit television (CCTV) is another firm step towards adopting an increasing number of digital solutions. Moreover, there is now a stronger focus of integrating digital initiatives in the education sector, apparent from the announcement of moving from ‘blackboards to digital boards’. To implement this, the government has set aside a budget of INR 1 lakh crore over the next four years for the revival of infrastructure and systems in education. A sizeable INR 2.04 lakh crores have been allocated to 99 cities under the smart cities mission. All of this should go the distance in realising the ‘Digital India’ dream.

IN LINE WITH THE ‘MAKE IN INDIA’ AGENDA, FINANCE MINISTER ARUN JAITLEY ANNOUNCED THE REDUCTION OF CORPORATE TAX TO 25%, FOR A WIDER BASE OF ENTITIES, NOW EXTENDING TO THOSE WITH A TURNOVER OF UPTO INR 250 CRORES. THIS SHOULD HELP MOTIVATE MSME COMPANIES IN THE IT SECTOR TO PROFITABLY MANUFACTURE IN INDIA.

DOMESTIC MANUFACTURINGIn addition to the above announcements, there is a definitive move in favour of domestic manufacturers. In line with the ‘Make in India’ agenda, Finance Minister Arun Jaitley announced the reduction of corporate tax to 25%, for a wider base of entities, now extending to those with a turnover of up to INR 250 crores. This should help motivate MSME companies in the IT sector to profitably manufacture in India.

NIELSEN VIEW The three focus areas of the government, namely Digital India, Startup India and Make in India, all aim to establish India as a digital society, not just in terms of doing business but also adopting a digital way of living. There is a strong emphasis by the government for the use of technology in government projects for implementation and compliance efficiency. In this transition, the IT industry will play the crucial role of a facilitator. There is reason to believe that the announcements in the digital sphere and IT sector are for the long term, because for the first time, Niti Ayog has been tasked with establishing a national programme on artificial intelligence.

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INFRASTRUCTUREThe Union Budget 2018 has brought with it an upwards figure for the Ministry of Road Transport and Highways, as compared to the INR 64,900 crores allocated last year. At INR 71,000 crores, it is clear that we can expect several projects underway in the upcoming fiscal year.

ON THE ROAD TO DEVELOPMENT An estimated cost of INR 5,35,000 crores has been approved by the government to construct roads totalling a length of 35,000 kms under the Bharatmala Pariyojana. To further the cause of infrastructural progress, INR 19,000 crores has been dedicated for the construction of roads in rural areas as part of the Pradhan Mantri Gram Sadak Yojana (PMGSY).

Connectivity has been given considerable attention during this budget session. Ude Desh Ka Aam Nagrik, popularly known as UDAN, is a scheme that the government spearheaded last year. Without missing a beat in this fiscal year, it is expected to connect 56 unserved airports and 31 unserved helipads across the country. This scheme will make noticeable headway in the dissolution of the connectivity concern.

The government gave wing to airports with an allocation of INR 1,014.09 crores devoted to the revival of 50 airports, and Visibility Gap Funding has been provided for the improvement of aviation infrastructure in the North East states. This effort has taken flight under the flagship regional connectivity scheme.

THE GOVERNMENT GAVE WING TO AIRPORTS WITH AN ALLOCATION OF INR 1,014.09 CRORES DEVOTED TO THE REVIVAL OF 50 AIRPORTS, AND VISIBILITY GAP FUNDING HAS BEEN PROVIDED FOR THE IMPROVEMENT OF AVIATION INFRASTRUCTURE IN THE NORTH EAST STATES.

The amount allocated this year is almost five times the revised estimate of 2017-2018; a clear sign of the infrastructural growth that seems to be just down the road.

SEEMA KAPUR DIRECTOR, NIELSEN INDIA


Meanwhile, the railways have received a capital expenditure allocation of INR 1.48 lakh crores. This sum is meant to be utilised to redevelop railway stations while also setting up escalators, CCTVs and Wi-Fi facilities. It is anticipated that this sum will aid in the refurbishment of 600 major railway stations.

THE AMOUNT ALLOCATED THIS YEAR IS ALMOST FIVE TIMES THE REVISED ESTIMATE OF 2017-2018; A CLEAR SIGN OF THE INFRASTRUCTURAL GROWTH THAT SEEMS TO BE JUST DOWN THE ROAD.

The government has not neglected the water supply concern either. The announcement of a programme which is to focus on water supply to all households in 500 cities has been a highlight this session. Contracts for 494 projects worth a sizeable sum of INR 19,428 crores will be awarded, a welcome piece of infrastructural news for all.

NIELSEN VIEW There has been a remarkable rise in the total capital outlay by 20% which has raised the current sum for the infrastructure sector to INR 5.97 lakh crores. Railways and roads are meant to be the primary focus of any increased capital outlay and that has been adequately depicted in this year’s budget. But a rather welcome addition to this lot has been an increased focus on rural and urban infrastructure through the development of rural roads, houses, sanitation, irrigation and water supply.

BUT A RATHER WELCOME ADDITION TO THIS LOT HAS BEEN AN INCREASED FOCUS ON RURAL AND URBAN INFRASTRUCTURE THROUGH THE DEVELOPMENT OF RURAL ROADS, HOUSES, SANITATION, IRRIGATION AND WATER SUPPLY.

The channelled focus on these infrastructural factors will have a multiplier effect on the Indian economy. The core and allied sectors will be directly affected as a result of the funds allocated and projects predicted. Moreover, demands for several industries will skyrocket including cement, steel and allied building construction materials. Other sections that will benefit are construction/engineering companies (EPC) and medium and small contractors, who would stand to gain from the increased contracts awarded for various projects. As a corollary, construction equipment sector and industrial explosives will also witness increased demand. The movement of vast chunks of construction material will also benefit the transportation and logistics sector, as well as the large commercial vehicle segments. Simultaneously, an indirect impact can be foreseen as more employment will be generated with an increased consumption in tow.

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MEDIA AND ENTERTAINMENTIn the run-up to the general elections scheduled for later this year, the Union Budget 2018 sought to make a powerful statement on the government’s priorities; the spotlight this year has clearly been on the rural economy and agriculture. So while the budget had little in store for the media and entertainment (M&E) sector, it did have several announcements that could impact consumer behaviour, and consequently the industry.

There were three encouraging announcements for the M&E industry.

DOLLY JHA EXECUTIVE DIRECTOR, NIELSEN SOUTH ASIA

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1. BUDGET ALLOCATION FOR THE I&B MINISTRY The government has allocated INR 4,089 crores to the Ministry of Information and Broadcasting (I&B). Even though this is a 7.25% dip in the initial allocation from the previous year, it is 13.42% higher than the previous year’s revised figure of INR 3,605 crores. More than half of this amount has been allocated to the state-run channels of Doordarshan and All India Radio, with a view to boost media consumption in rural areas. An additional grant of INR 315 crores to public service broadcaster Prasar Bharti, to drive the ‘Kisan’ and ‘Aruna Prabha’ channels, is another indication of the government’s intent to strengthen its outreach and expand the media-consumption market in rural India. Media consumption may also be affected by the fact that the salaried class did not receive any relief from this year’s budget, though the elderly have reason to cheer.

2. DOUBLING OF THE BUDGET ALLOCATION FORTHE DIGITAL INDIA INITIATIVE A very encouraging announcement from this year’s budget has been the allocation of INR 3,073 crores for the Digital India initiative, a figure that has doubled from last year. Additionally, INR 10,000 crores has been set aside to provide 500,000 Wi-Fi hotspots in rural areas. The government also intends to expand the scope of Eklavya Schools, with internet enabled e-classrooms, to cover every block where tribal people comprise more than 50% of the population, as long as there are at least 20,000 tribal people in the block under consideration. These initiatives will empower more than five crore rural Indians with internet access, and result in a hugely increased digital capability in large untapped rural areas. Marketers stand to gain immensely with the increased ability to reach out to the massive rural segment through the digital medium. Digital advertising, already growing at a faster rate than traditional channels, will now become an important conduit to engage with the large number of rural consumers. Brands can then look forward to planning their advertising strategies for rural markets with a strong focus on internet-led content for mobile and over the top (OTT).

THESE (DIGITAL) INITIATIVES WILL EMPOWER MORE THAN FIVE CRORE RURAL INDIANS WITH INTERNET ACCESS, AND RESULT IN A HUGELY INCREASED DIGITAL CAPABILITY IN LARGE UNTAPPED RURAL AREAS. MARKETERS STAND TO GAIN IMMENSELY WITH THE INCREASED ABILITY TO REACH OUT TO THE MASSIVE RURAL SEGMENT THROUGH THE DIGITAL MEDIUM.

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3. COMMITMENT TO TECHNOLOGY From the beginning of its term, the current NDA government has shown a keen interest in developing a technology-forward India. In line with this goal, budget 2018 reflected the government’s commitment to developing cutting edge technologies such as machine learning, artificial intelligence (AI), blockchain, big data, internet of things (IoT) and robotics. Enhanced research in these fields will have a positive impact on the advertising industry by helping organisations to widen their scope, increase efficiencies and improve the rate of customer satisfaction. these developments, opens up opportunities for digital advertising which will play a significant role in a brand’s efforts to enhance its consumer base.

NIELSEN VIEW Through an array of announcements for consumers, the Union Budget 2018 is expected to enhance media consumption. The strong focus on strengthening the rural economy through programs like rural electrification and the NHPS, is expected to improve the livelihood of consumers in rural areas. Effectively, this should lead to increased income for rural folk in the medium to long term, and subsequent growth in traditional media channels such as television and radio. However, the real game-changer is the inclusion of a potentially large mass of rural consumers into the digital fold at an accelerated rate. This new generation of digital-savvy rural consumers with higher disposable incomes certainly present a sizeable prospect for the world of media, advertising, and marketing. While the broadening base of evolved rural consumers anticipate interesting value propositions, it is now up to brands to make the most of the opportunity.


AJAY MACADEN EXECUTIVE DIRECTOR, NIELSEN INDIA

THE RETAIL SECTORThe retail sector is still buzzing in the afterglow of all the activity throughout the last year. In 2017, policies were amended to allow 100% foreign direct investment (FDI) in single-brand retail. The government subsequently also approved 100% FDI in the textile and jewellery sectors. However, the most consequential step taken by the centre was the implementation of GST as a single, unified tax system, leading to an increase in organised retail by aiding transparency. Additionally, the new system has had an impact on traders and suppliers, and eventually helped to attract attention and participation from global players.

In contrast, in the 2018 budget, the government did not introduce any new measures for the retail sector. Nevertheless, several significant announcements will tangentially benefit retail too. For instance, the centre’s strong focus on infrastructure, universal healthcare for the poor, education and employment opportunities, will certainly result in better access to retail and greater spending power among consumers. The increased allocation for food processing, the minimum price enabled for the crops of farmers, and huge investments in agricultural markets, particularly in rural areas will help farmers and companies by spurring stability and growth. All this will have a positive fallout on the retail sector.


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THE CENTRE’S STRONG FOCUS ON INFRASTRUCTURE, UNIVERSAL HEALTHCARE FOR THE POOR, EDUCATION AND EMPLOYMENT OPPORTUNITIES, WILL CERTAINLY RESULT IN BETTER ACCESS TO RETAIL AND GREATER SPENDING POWER AMONG CONSUMERS.

KEY ASPECTS OF BUDGET 2018 THAT WILL IMPACT THE RETAIL SECTOR #1 Corporate tax

The reduced corporate income tax rate of 25%, now applicable to MSME with a turnover of up to INR 250 crores, will help a large number of retailers within that bracket.

#2 Food chain and logistics

INR 10,000 crores has been allocated to fisheries, aquaculture and animal husbandry, and there is a proposal to invest INR 2,000 crores on developing and upgrading the agricultural electronic and offline market structure. This impetus to food chain and logistics will encourage development and sourcing of produce directly from the source or the farmer, thereby getting better and fresher quality produce and a wider variety to the consumer. In the foreseeable future, it may result in the fall of supply chain costs.

#3 Food processing

Currently at a growth of 8%, the allocation to the food processing ministry has been doubled to INR 1400 crores, indicating further growth for the food sector.

THE IMPETUS TO FOOD CHAIN AND LOGISTICS WILL ENCOURAGE DEVELOPMENT AND SOURCING OF PRODUCE DIRECTLY FROM THE SOURCE OR THE FARMER, THEREBY GETTING BETTER AND FRESHER QUALITY PRODUCE AND A WIDER VARIETY TO THE CONSUMER. IN THE FORESEEABLE FUTURE, IT MAY RESULT IN THE FALL OF SUPPLY CHAIN COSTS.


#4 Consumer durables

The government has promised eight crore free gas connections to women below the poverty line under the Pradhan Mantri Ujjwala Yojana (UJJWALA), and free electricity connections to four crore under-privileged women. This will spur retail sales of consumer durables.

#5 Pharmaceutical retail

Pharmaceutical retailers have reason to cheer with the allocation of INR 1200 crores towards creating 1.5 lakh wellness health centres, and the setting up of 24 new government medical colleges and hospitals.

#6 Digital initiatives

There is an allocation of INR 2.04 lakh crores towards developing 99 smart cities. While this would primarily benefit infrastructure, it will help the retail sector by expanding the omni-channel connect with consumers. The focus on digital capability development should bode well for retail in general by enabling awareness and access.

NIELSEN VIEWThe focus of budget 2018 is clearly on uplifting the rural populace, inclusion, infrastructure and building digital capabilities. The allocations and provisions to increase employment and stability will result in higher income for rural folk. This will impact consumption, and consequently give the retail sector an opportunity to capitalise on. By Finance Minister Arun Jaitley’s own admission, the intention with every budget has been to put more money into the hands of the middle-class tax payer.

Specifically, this budget will see an effect on the food business, and result in the rise of retail penetration and consumption in rural areas. Increased disposable incomes in rural India will help spur consumption and hence impact the retail sector positively.

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AGRICULTURE Agriculture was at the heart of budget 2018, which revealed the government’s fiscal intentions for the sector. One of the most popular announcements has been the standardisation of the MSP for all announced kharif crops, a most welcome development. Much like that of rabi crops, the MSP will now be one and a half times the cost of production.

Another big step was the raising of the Institutional Farm Credit. Leaping forward in time and upward in proportion, the INR 8.5 lakh crore figure of 2014 has now climbed its way up to INR 11 lakh crores. The agricultural cause is continuing to make headway through the announcement of 22,000 rural haats which are to be developed and upgraded into Gramin Agricultural Markets in order to protect the interests of 86% small and marginal farmers.

ONE OF THE MOST POPULAR ANNOUNCEMENTS HAS BEEN THE STANDARDISATION OF THE MSP FOR ALL ANNOUNCED KHARIF CROPS, A MOST WELCOME DEVELOPMENT. MUCH LIKE THAT OF RABI CROPS, THE MSP WILL NOW BE ONE AND A HALF TIMES THE COST OF PRODUCTION.

Furthering the theme of progress, under ‘Operation Green’, INR 500 crores has been dedicated to promote agricultural logistics. Meanwhile, allocation for the Food Processing Ministry has been doubled. To meet India’s extraordinary agricultural exports potential of $100 billion, export of agricultural commodities has been liberalised.

This potential is being further encouraged by adopting an approach of a favourable taxation treatment for farmer producer organisations. Simultaneously, in an exciting turn for the industry, two new funds of INR 10,000 crores have been announced for the fisheries as well as the animal husbandry sectors. Both sectors are also expected to benefit from the government extending the facility of kisan credit cards to those in the two sectors. At the same time, the bamboo sector can look forward to an exciting period of growth as the re-structured National Bamboo Mission received INR 1,290 crores for its advancement.

SEEMA KAPUR DIRECTOR, NIELSEN INDIA


SIMULTANEOUSLY, IN AN EXCITING TURN FOR THE INDUSTRY, TWO NEW FUNDS OF INR 10,000 CRORES HAVE BEEN ANNOUNCED FOR THE FISHERIES AS WELL AS THE ANIMAL HUSBANDRY SECTORS.

NIELSEN VIEW – IMPACT ON THE INDUSTRY Budget 2018 has set its focus on strengthening demand with the aim of bettering the lives of 60%-65% of India’s population, whose economic status and sustenance relies on agriculture. The announcement pertaining to the Mega Food Parks revealed the shift towards liberalising export and increasing testing facilities. An increased outlay in food processing, and the amplified investments in the agricultural logistics sector will boost the demand for agricultural produce. These efforts are directed towards improving farm income. Once improved, we can look forward to a multiplier effect on the farm sector. Among the aspects of the farm sector expected to better, are the inputs involved in production such as fertilizers, seeds, pesticides, irrigation, agricultural machinery and insurance companies. A cumulative effect will be a skyrocketed demand directly benefitting sectors such as FMCG, durables and auto; eventually channelling the multiplier effect on the economy by generating employment.

A CUMULATIVE EFFECT WILL BE A SKYROCKETED DEMAND DIRECTLY BENEFITTING SECTORS SUCH AS FMCG, DURABLES AND AUTO; EVENTUALLY CHANNELLING THE MULTIPLIER EFFECT ON THE ECONOMY BY GENERATING EMPLOYMENT.

On the other hand, the supply section has not been neglected either. Providing fertilizer and irrigation subsidies is a method through which the government is starting to support supply. Moreover, to monetarily reinforce their encouragement, the budget will extend institutional credit to farmers. The third cause being championed to further support is through the means of crop protection, with all measures looking to reduce variability and risk attached to agriculture.

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But these aren’t standalone actions in the effort to improve the agricultural landscape in India. Other exertions such as incentivising allied farm activities as well as rural non-farm activities and substantial credit provided to women self-help groups, are also impactful steps that are parts of a whole effort towards a developed agricultural future. Agricultural infrastructure can expect a digitised makeover as 22,000 Gramin Agricultural Markets become linked to eNAM, a National Agriculture Market online. The small and marginal farmer will no longer have to heavily rely on ad hoc trading with unscrupulous traders and can instead attach a better price to their produce.

Increased outlay on digital connectivity will better farmer prospectswith improved access to more information. This will result in a bettermanaged production cycle along with better pricing that is favourableto the farmers, ensuring that the increasing demand will be met with asmooth running supply.

THE AGRICULTURAL INFRASTRUCTURE CAN EXPECT A DIGITISED MAKEOVER AS 22,000 GRAMIN AGRICULTURAL MARKETS BECOME LINKED TO ENAM, A NATIONAL AGRICULTURE MARKET ONLINE.

In conclusion, the MSP, now one and a half times the cost of production, is a move to strengthen the farming community, especially by positively affecting the marginal and small farmers’ income.However, implementation of this measure may prove to be a challenge. Especially with respect to calculating the cost of production since it depends on many variables such as regional variations, crop variations, and the very nature of the agricultural sector being largely informal. The government’s view on implementing MSP is unclear other than referring the matter to Niti Aayog to come up with a solution and plan of action.

Additionally, benefits will manifest depending on how soon the various investments and outlays are implemented. Therefore, the answer to the question of how fully the benefits find their way to the farmer is in flux.

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TELECOMMUNICATIONSNew realities have emerged in the telecom sector this last year, and agile industry players have harnessed business growth by consolidating, and exploring growth in handsets. The industry faced headwinds from stagnant mobile internet penetration and revenue pressures, but the government’s focus on rural development, infrastructure and agriculture will go the distance in driving growth for the telecom industry. The repercussions of budget 2018 on the telecom sector can be divided into three broad themes.

1. DIGITAL INDIA AND RURAL CONNECTIVITY The digital dream has been a steady area of focus for the centre from the very beginning of their term. Even budget 2017 reflected this with an allocation of INR 10,000 crores for expanding the Bharatnet project to connect 1.5 lakh panchayats with internet. This, together with the aim to deploy free Wi-Fi in 1050 villages under the ‘Digital Village’ initiative have been important measures at a scale large enough to have an impact. This year too, INR 10,000 crores have been allocated to augment and expand telecom infrastructure. Additionally, there is a commitment to set up five lakh Wi-Fi hotspots in rural India to provide broadband access to a massive five crore people. A year down the line from these announcements the nation suffered from delayed execution. ‘Digi Gaon’, another initiative along similar lines, to promote tele-medicine and education, failed to make much headway. Had implementation matched up to the intended plan, this could have resulted in digital inclusion and the opportunity for value added services (VAS) by content providers, to grow. So, while the announcements this year are a great start, studies confirm our fears from last year that the actual execution of these initiatives will need to be planned far better. Responsibility and accountability between the union government, state governments, gram panchayats and telecom operators is imperative for success

WHILE THE ANNOUNCEMENTS THIS YEAR ARE A GREAT START, STUDIES CONFIRM OUR FEARS FROM LAST YEAR THAT THE ACTUAL EXECUTION OF THESE INITIATIVES WILL NEED TO BE PLANNED FAR BETTER. RESPONSIBILITY AND ACCOUNTABILITY BETWEEN THE UNION GOVERNMENT, STATE GOVERNMENTS, GRAM PANCHAYATS AND TELECOM OPERATORS IS IMPERATIVE FOR SUCCESS.

ABHIJIT MATKAR DIRECTOR, NIELSEN INDIA

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2. TAXATION AND ACCOUNTING For the second year running, telecom operators were left disappointed with the continued lack of clarity on the tax treatment of spectrum payments. Secondly, telecom operators were hopeful of a cut in the withholding tax on discounts offered to distributors of prepaid mobile connections, another important front on which they were disappointed. Since most of these distributors are a part of the unorganised sector, it is essential for the sake of transparency and clarity, to resolve the ambiguity surrounding withholding tax. We continue to believe that distributors are practically the first ‘customers’ of telecom operators. Consequently, a healthy working relationship with them is absolutely necessary for operators to win in the fiercely competitive industry. Yet, satisfaction studies show that over the last two or three years, amidst increasing business pressures, telecom distributors rate their satisfaction with operators at just about average. Lastly, telecom operators have been expecting the exclusion of standard telecom services from the definition of ‘Royalty’ for the last two years. This again, has not been addressed in this year’s budget.

On the brighter side, according to a new provision, foreign exchange gains and losses other than on borrowing for import of assets, will be considered to be on revenue account. This should help telecom companies get cheaper foreign currency loans to finance and refinance spectrum purchases.

3. MAKE IN INDIA Two announcements in budget 2018 are expected to add considerable value to domestic players in the telecom industry. First, the government has extended the reduced corporate tax rate of 25% to companies with a turnover of upto INR 250 crores, a huge encouragement to the MSME segment. Secondly, this budget has met the industry’s long-pending demand of duty-protection to support manufacturing operations, by proposing to increase the rate of customs duty on mobile phones to 20% from the current 15%. To top this, customs duty on various mobile parts like batteries, SIM Slots and screws are proposed to be increased to 15% encouraging domestic production of these components. Duty hikes on accessories and related products like mobile covers, camera lenses and smart watches should also encourage companies to ‘Make in India’, in the long term. If these measures result in making devices affordable in India, it will help grow the base of consumers who have so far been unable to access mobile internet because of the expense involved. Studies have shown that after non-relevance, non-availability of internet-enabled handset, and the perception that such handsets are expensive, are the two most common barriers to mobile internet adoption.


THIS BUDGET HAS MET THE INDUSTRY’S LONG-PENDING DEMAND OF DUTY-PROTECTION TO SUPPORT MANUFACTURING OPERATIONS, BY PROPOSING TO INCREASE THE RATE OF CUSTOMS DUTY ON MOBILE PHONES TO 20% FROM THE CURRENT 15%.

NIELSEN VIEW The telecom industry is in the middle of a whirlwind of both issues and opportunities. There is consolidation between operators, the entry of a new player, disruptive innovations and dipping revenues. At this time, the sector could do with all the support it can get from the government by way of favourable policies and clarity on long-pending demands. Admittedly though, the government’s relentless efforts to build infrastructure and drive the digital agenda is certainly encouraging for the industry in the long term.

So, while the telecom sector will continue to play an active role in the government’s vision of Digital India, there is a need for a more concerted focus on addressing the issues plaguing the sector.

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