Government realises the Indian celluloid industry potential

Tuesday, 26 December 2006, 06:00 Hrs
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New Delhi: After treating the entertainment industry like a stepchild for decades, the Indian government has realized its potential and is leaving no stone unturned to boost the business.

Before 2001, finance was a huge problem for filmmakers and the lack of funding took its toll on creativity and variety. The traditional financers were not keen to take risks and churned out formula films suitable for big stars only. This restriction barred the entry of fresh minds and untried faces in filmdom.

But from 2001 onwards several steps were taken by the government to boost the business and the first move in this direction was taken when Reserve Bank of India's (RBI) allowed bank finances for films.

After suffering for decades in the hands of traditional financers, Indian film industry, especially Bollywood, witnessed a phenomenal change after the entry of banks.

"Through our vigorous efforts, we have been able to reduce the level of entertainment tax. We have simplified procedures and reduced the time required for granting permission to shoot foreign feature films in India," Information and Broadcasting Minister Priya Ranjan Dasmunsi said in the Lok Sabha recently.

Entry of banks into film business lured corporate players like UTV, Percept Picture Company. Their entry ensured the quality of films, ample opportunities for wannabes and variety. For independent filmmakers, it turned out to be a blessing in disguise, because they could speak their mind through their craft.

Apart from that, entry of Non Traditional Financing Sources (NTFS) has boosted the business and profits started moving toward record levels.

According to Yes Bank Survey reports conducted till 2004, the number of films partially or fully financed from one or more NTFS has increased from six in 2001 to 46 in 2004.

Cumulatively, NTFS contribute 2.56 billion in 2004 as compared to 485 million in 2001. This constitutes more than 50 percent of total project outlay of top 50 Hindi films produced and released in 2004 and underlines the rapidly transforming funding sources for Hindi films.

Not only that, 20 out of 46 films financed from NTFS in 2004 were associated with the new directors which points towards the role being played by NTFS in nurturing and developing new talent in filmmaking.

And 61 percent of films financed from NTFS were funded by private equity from individuals and corporate houses. Apart from that, 93 percent films funded from one or more NTFS in 2004 involved equity financing.

The trend continued this year with UTV producing big hits like films "Rang De Basanti", "Krrish", "Khosla Ka Ghosla" and Percept Picture Company churning out "Dor", "Corporate" and "Malaamal Weekly".

These films created history at the box office - both in money and content.

Not only that, since 2001 NTFS have increased their presence at the expense of one or more of producers' contribution, distribution and private financiers.

Apart from finances, government is also focusing on popularizing films in the overseas market.

The government is encouraging participation in global events like the Cannes Film Market, the American Film Market, and the Berlin Film Market among others to enhance Bollywood's visibility, said Dasmunsi in a written statement.

Film weeks and festivals are being conducted in various countries while the government had also signed an audio-visual co-production agreement with Britain and Italy.

Similar proposals from other countries were being explored to expand avenues of finance and markets for the Indian film industry.

To ensure the smooth functioning of the entertainment industry, a committee for development of entertainment sector was set up to suggest a policy framework for the film industry, suggest steps to counter piracy and to facilitate shooting of foreign films, Dasmunsi added.

Apart from this, the state-owned National Film Development Corporation had been providing limited funding for films.

"I personally think that just like financial markets in the 1980s, telecom in the 1990s and early 2000 and transport as it has happened today, entertainment will be big. As it will become large and the requirement for the content becomes critical, there will be corporatisation," said Subroto Chattopadhyay, managing director, Saregama.

"You need to have ability to produce high quality content in very large volume and it cannot be done by an individual. So there will be corporatisation. It will change the way content is created and I think next three to four years will see huge change. Independent filmmakers will get involved because it is an art form and of course, government will enable us," added Chattopadhyay.

After ruling the music industry for decades, Saregama is also spreading its wings and set to foray into film producing business.

If 2006 saw big hits and big bucks, the entertainment industry is going to reap phenomenal success in 2007 as well. Also, more and more players will enter the sector.
Source: IANS
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