ONLINE
GAMING IN INDIA – ECONOMY
News: GST Council to impose
28% tax on online gaming firms
What's
in the news?
● The
Goods and Services Tax (GST) Council, at its 50th meeting, reduced or clarified
the tax rate on some items ranging from uncooked or unfried snack pellets to
special utility vehicles (SUVs), exempted imported drugs to treat cancer and
rare diseases, and brought an end to a years-long debate on tax treatment of
online gaming, casinos and horse racing.
Online
gaming in India:
● With
over 13 crore users across 200 platforms, India is the world's largest market for fantasy sports.
● The
government noted that the number of people participating in online rummy is
increasing.
● To
distinguish the games, India divides them into two broad categories. The game
is classified as either a Game of Chance or a Game of Skill.
1. Game of chance
(Gambling): Games of chance are any games that
are played at random. These games are based on chance. These games can be
played without prior knowledge or understanding. For instance, dice games,
number selection, and so on. Such games are illegal in India.
2. Game of skill (Gaming):
Games of skill are any games that are played based on a person's prior
knowledge or experience with the game. A person will need skills such as
analytical decision-making, logical thinking, capability, and so on. Some games
may also necessitate some preliminary training in order to win. The majority of
Indian states consider such games to be legal.
Evolving
market:
● The
revenue of the Indian mobile gaming industry is expected to exceed $1.5 billion
in 2022, and is estimated to reach $5
billion in 2025.
● The
industry in the country grew at a CAGR of 38% between 2017-2020, as opposed to
8% in China and 10% in the US.
● India’s
percentage of new paying users (NPUs) in gaming has been the fastest growing in
the world for two consecutive years, at 40% in 2020 and reaching 50% in 2021.
Advantages
of Online Gaming:
1.
Entertainment:
● There
are several available and new games that create a variety for a player to
choose from. In countries where there is the availability of broadband
internet, online gaming has become a staple kind of entertainment.
2.
Earning:
● It
is also possible to gain cash via online gaming as a result of winning games.
This can earn the players a lot of money as long as one has the skills and
talent for online gaming.
3.
Avoid life threatening behaviour:
● Online
gaming is advantageous as it can occupy the mind and avoid people, especially
youths from getting involved in life threatening behaviour such as drug taking
and joining youth gangs.
4.
Gaming knowledge:
● At
least online gaming is more constructive.
● Online
gaming can also help expand and improve gaming knowledge and also
experience.
5.
Competition behaviour:
● Online
gaming also encourages competition.
● One
player competes against others playing the same game so as to win more
money.
6.
Sharper people:
● Online
gaming is that it makes a player mentally active and sharper too.
Concerns
of Online Gaming:
Stakeholders have highlighted a number of societal concerns that can
arise from the proliferation of online games in the country.
1.
Addiction:
● It
may cause addiction and time meant for other activities may be consumed in
online gaming.
● It
is an absolute challenge for parents to supervise and monitor their children
and their activities in order to prevent addiction.
2.
Harassment and abuse:
● Online
harassment may also occur especially with children who get involved in online
gaming.
● Children
playing games online may lead to online abuse.
3.
Social isolation:
● Social
isolation due to over indulgence is one of the consequences.
● Increased aggression,
negative academic and occupational consequences.
● Lack
of physical activities/hobbies.
4.
Access to unsafe content:
● Access
to unsafe content/ age inappropriate content.
● Parents
need to see the intricacies with which online gaming and pornography is linked.
● If
kids play online, that is a pornographer's heyday for marketing, grooming and
hooking young consumers.
5.
Increasing suicide:
● There
have been a number of reported incidents of people losing large sums of money on
online games, leading to suicides in various parts of the country.
● Earlier,
the World Health Organisation (WHO) had announced a plan to include “gaming disorder” as a mental health
condition.
6.
No regulatory framework:
● There
is currently no regulatory framework to govern various aspects of online gaming
companies such as having a grievance redressal mechanism, implementing player
protection measures, protection of data and intellectual property rights, and
prohibiting misleading advertisements.
7.
Threat to Data privacy:
● Inadvertent
sharing of personal information can lead to cases of cheating, privacy
violations, abuse, and bullying.
8.
Betting and gambling:
● Online
games based on the traditional ludo, arguably the most popular online game in
India, have run into controversy, and allegations of betting and gambling.