Is the Indian government missing out on billions?
There are thousands of other search engines, internet service providers, online news portals and community networks that attract millions of surfers and earn billions of dollars for simple clicks.
The critical issue is that a significant number of these clicks that generate the above said billions originate in India – where surfers clearly use national infrastructure (routers, cross-country transponders, transmission lines, and the works). We propose that the government taxes a small part of the revenue that various international and national net based companies earn through the pay-per-click route. That is, we’re proposing that in the same way as Google (through their Ad-Sense module) pays a part of their earned revenues to partner sites – if the click on Google’s client’s ad was made through the ad displayed on the partner’s site – Google should also then necessarily pay the Indian government a part of that pay-per-click revenue earned, if the click has been made inside the national boundaries of India.
Interestingly, online ad spending is on rise in India. The online ad expenditure in 2006 was around Rs. 2.1 billion, which increased to Rs. 4.5 billion in 2007. The same is expected to reach Rs.22.5 billion by the end of 2009. There are 2.707 million internet hosts while the country has 80 million internet users; even this is increasing drastically. Today, online advertising contributes $300 billion to the American economy (2.1% of the GDP). What say the Indian government partakes of some of it?
There are thousands of other search engines, internet service providers, online news portals and community networks that attract millions of surfers and earn billions of dollars for simple clicks.
The critical issue is that a significant number of these clicks that generate the above said billions originate in India – where surfers clearly use national infrastructure (routers, cross-country transponders, transmission lines, and the works). We propose that the government taxes a small part of the revenue that various international and national net based companies earn through the pay-per-click route. That is, we’re proposing that in the same way as Google (through their Ad-Sense module) pays a part of their earned revenues to partner sites – if the click on Google’s client’s ad was made through the ad displayed on the partner’s site – Google should also then necessarily pay the Indian government a part of that pay-per-click revenue earned, if the click has been made inside the national boundaries of India.
Interestingly, online ad spending is on rise in India. The online ad expenditure in 2006 was around Rs. 2.1 billion, which increased to Rs. 4.5 billion in 2007. The same is expected to reach Rs.22.5 billion by the end of 2009. There are 2.707 million internet hosts while the country has 80 million internet users; even this is increasing drastically. Today, online advertising contributes $300 billion to the American economy (2.1% of the GDP). What say the Indian government partakes of some of it?
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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