‘Central Govt is being unrealistic & unreasonable’ – Karnataka IT Minister Priyank Kharge criticizes Centre for its online gaming policies

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India’s online gaming sector has grown by leaps and bounds over the past few years. In fact, it has become much formidable since 2020. Karnataka’s IT Minister Priyank Kharge was also of the same opinion, and has an optimistic stance for increment in the sector. However, Kharge said that the central government is killing the market with recent increased GST rates.

Notably, starting October 1, 2023, the GST Council implemented a 28% GST on online gaming, casinos, and horse-racing. Most of the states in India, including Karnataka, have followed suit in implementing the same. Despite this, Kharge said that the increased GST is killing employment in the sector.

The IT Minister took to his X to opine his views in relation to the 28% GST rates on the said activities. “The gaming companies want to be regulated, but Central Govt is being unrealistic & unreasonable with their demands, which is not only killing employment in the sector, but is also driving away gamers to Chinese & European gaming sites where they are getting duped,” he posted.

See Kharge’s post here:

Kharge cited the positive contributions of the online gaming sector, and also said that the industry wants to get regulated. However, he feels the government is delaying the regulation by being unrealistic and unreasonable with their demands. According to him, this is leading gamers in India to move to European and Chinese platforms, which dupe them.

India’s online gaming market to reach capitalization of 33,243 crores by FY28

Kharge also quoted EY’s report, indicating a 28% CAGR between 2020 and 2023 for the sector. The same report suggested the market size of India’s online gaming sector to be Rs 16,428 crore in 2023. Further, it also suggested that the market is expected to reach Rs 33,243 crore in 2028.

India is currently the second-largest market for online gaming. However, the 45-year-old feels that if the Centre keeps putting obstacles, other countries may take over. He further remarked it as a wake-up call for the Centre to realize the true potential of India’s online gaming industry.

Giving the current statistics, he further says that India currently have 1400 online gaming startups. Gamers have contributed to over 430 crore downloads of these gaming apps, further taking notes from the report on how TDS contribution by FY24-28 is expected around 6,500−6,800 crore while GST contribution by real money gaming sector to be around 76,000 crore.

However, the recent GST changes came as a slap to the entire industry, leading to several lay-offs and shutdown. On top of that, 71 gaming firms have been handed GST showcause notices on retrospective taxation basis that threatens the very existence of the industry.

The foreign gaming platforms that the minister spoke about are also worth paying attention to. Most of these platforms are illegal in India. Yet, they operate and lure users through various dirty marketing tactics. Promotion through celebrities and influencers is one of the biggest weapon of such platforms, which lures innocent Indian users.

People who are unsure regarding the illegitimacy and banned apps information can check here.