economic | Business Upturn

India’s online gaming industry gears up for growth with regulation

Eesha Chakraborty — Fri, 23 Feb 2024 16:37:59 +0000

India’s online gaming industry which is the world’s second-largest gamer base, finds itself at a crossroads. Despite its immense potential, the lack of a cohesive regulatory framework has hampered its growth, casting a shadow over investments, talent acquisition, and innovation. However, the Modi government has taken the initiative to establish a comprehensive regulatory framework.

The challenges plaguing the online gaming domain are manifold. The implementation of a new tax framework in late 2023 saw the sector’s GST contribution skyrocket by 400%, translating to a staggering Rs. 1,200 crore per month. Furthermore, the industry employs over one lakh individuals directly and indirectly, a number poised to double within the next five years under a supportive regulatory environment.

The absence of clear-cut regulations creates uncertainty for investors, making them hesitant to pour capital into a market riddled with ambiguities. This, in turn, restricts the industry’s growth potential and hampers job creation. Additionally, the lack of a uniform regulatory framework across different states leads to conflicting interpretations of laws, creating operational hurdles for gaming companies. This inconsistency discourages talent from entering the sector, further impeding its progress.

Recognizing the critical role online gaming can play in India’s journey towards becoming a “Viksit Bharat” by 2047, the Modi government has taken decisive steps towards establishing a regulatory framework. The formation of an “informal Group of Ministers” (GoM) encompassing key ministries like MeitY, MIB, MoF, MHA, and PMO signifies the government’s commitment to a comprehensive and inclusive approach. Minister of State for Electronics and Information Technology Rajeev Chandrasekhar’s recent statements emphasizing an open, transparent, and consultative approach further underscore this commitment.

The potential benefits of regulation are manifold. Firstly, it can unlock a significant revenue stream for the government, particularly through the taxation of skill-based real-money games, a major driver of industry income. Secondly, it can create a plethora of job opportunities, with estimates suggesting a potential rise to 250,000 within the next few years. Thirdly, it can act as a catalyst for the growth of ancillary industries like cybersecurity, customer service, digital payments, and marketing, creating a ripple effect throughout the economy.

Furthermore, regulation can foster innovation in key technologies like AI, blockchain, and data analytics, propelling the industry to the forefront of technological advancements. This, in turn, can attract foreign investment and global gaming companies, further accelerating the sector’s growth.

Recent indications suggest a potential shift away from the Skill Regulation Bill (SRB) model, paving the way for a more independent regulatory body akin to the Telecom Regulatory Authority of India (TRAI). This centralized model can ensure fair competition, protect consumer interests, and maintain high-quality standards within the industry.

Union Budget 2024: Prioritizing investment over consumption for India’s economic transformation

Finance Desk — Wed, 31 Jan 2024 12:27:27 +0000

In the upcoming Union Budget, the focus on investment over consumption is deemed more pertinent for India’s economic landscape. Experts anticipate potential support for rural welfare schemes, possibly in the form of direct cash transfers or a social safety net. Chief Economist at Crisil, emphasized the government’s fiscal strategy, highlighting a preference for capital expenditure (capex) over direct consumption boosts. While there may be efforts to address the needs of the struggling rural sector, the primary thrust is expected to be on enhancing the productive capacity of the economy through investments. Chief Policy Advisor at EY India, underscores the relevance of the investment route, given global conditions and the shift toward capital-intensive techniques. He stressed the importance of recognizing both potentials and challenges as India moves towards becoming a developed economy. Chief India Economist at Citigroup, notes a unique economic cycle where the supply side is expanding rapidly while the demand side faces challenges. Balancing and synchronizing the demand and supply sides will be crucial for achieving a sustainable and stable equilibrium, ensuring a robust long-term growth strategy for India. As the budget unfolds, these insights shed light on the strategic emphasis on investment-led growth and the considerations for addressing economic challenges.

RBI allows settlement of trade transactions with Sri Lanka in INR

News Desk — Thu, 19 May 2022 16:49:13 +0000

Looking at the current economic crisis in Sri Lanka and the difficulties faced by exporters in getting payments from the failing island nation. Therefore, the Reserve bank of India on Thursday allowed settlement of trade transactions in Indian rupees outside the Asian Clearing Union (ACU) mechanism.

RBI circular says. “In view of the difficulties being experienced by exporters. In receipt of export proceeds from Sri Lanka. And SBI’s credit facility…It has been decided that such trade transactions with Sri Lanka. Falling under the said arrangement, may be settled in INR outside the ACU mechanism”.

The government had guaranteed a term loan of USD 1 billion. Extended by the State bank of India. To the Island nation for financing purchase of essential goods from India.

The crisis has been caused by a lack of foreign currency.

And the main reason for this crisis began in 2019. Also, when the tourism industry in Sri Lanka was hit badly due to the nationwide lockdown restricting trade.

The tourism industry was considered to be the backbone of Sri Lanka’s economy. However, now the industry is now failing.

This led the country in a state where they cannot afford to pay for imports of staple foods and fuel. As well as important commodities of survival. Hence, leading to acute shortages and very high prices.