After the announcement of the 21-day lockdown by prime minister Narendra Modi owing to the Covid-19 pandemic, several industries were under a state of shock, including newspaper and newsprint. The circulation of almost all newspapers were hit and some of its key revenue streams were blocked.
However, INS has come out in support of the newspaper sector and has demanded some key changes in order to keep the business floating.
In a letter to Sitharaman, Shailesh Gupta, president of INS, requested for a two-year tax holiday and removal of import duty on newsprint. Sounding a note of alarm, Gupta stated that the industry has been hit by "triple whammy of Coronavirus, plummeting advertisement revenue, and customs duty on newsprint".
"We are now facing a dire scenario of collapsing advertising and circulation due to Coronavirus, which has exacerbated an already difficult phase," Gupta mentioned in the letter. "Media's activity is essential and our newspapers are going above and beyond their call of duty in this pandemic, with editorial and other colleagues including production, printing presses, distribution vendors, putting themselves at great personal risk to be at the front lines to ensure readers get life-saving and other essential information day after day, in the safety of their homes."
It also stated that the domestic Indian newspaper industry in real danger of "turning sick due to collapsing advertising". The letter pointed out last year's shutting down of print operations of newspapers such as DNA, Financial Chronicle and Firspost Print, and other print editions on the verge of closure.
Citing the rise of social media and digital instant news platforms, Gupta said that the newspapers are already under severe financial pressure and unsustainable due falling advertising and rising costs coupled with an unprecedented digital onslaught from foreign technological giants. The letter said these issues have forced to shut down editions in many cities and towns, and reduce number of pages in underperforming editions.
"Coronavirus had a disastrous effect in the last few weeks, given that advertising is the first step that affected companies stop or cut back on. Circulation and events have also been sharply hit. Hence, the already thinning pages have had to be cut back even further and publishers may very soon have to make the extremely difficult call to shut down already deeply loss-making editions of newspapers if this scenario persists," Gupta noted.
The letter further stated: "The triple whammy of Coronavirus, low advertising and higher import duty impacts two major industries: If the domestic newspaper industry collapses, then newsprint intake collapses altogether and hits newsprint manufacturers."
Gupta mooted that the demand for newsprint can only grow if the newspaper industry is revived. He also requested for a level playing field between foreign digital giants and domestic newspapers.
Last year, a 10% import duty was imposed on the newsprint taking the total custom duty on newsprint to 15%. In this year Budget, 10% of duty was removed, but the newspapers still had to pay 5% duty, which the INS has demanded must be waived off.
"Our recommendation: Urgent need for a two-year tax holiday on newspapers and to remove all import duty on newsprint," the letter stated.
Demands put forward by INS
- Two-year tax holiday for newspapers.
- Remove the remaining 5% import duty on newsprint so that the duty regime goes back to the duty-free situation prior to the 10% imposition last year.