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Grow We Must

The film industry is much more than an entertainment body – it is a wealth creator, a stimulant for the economy and a power status with phenomenal reach. The government has no excuse for its lack of support


Kulmeet Makkar, Chief Executive Officer

The Film and Television

Producers Guild of India

It is extremely encouraging to see the value and respect the Indian film industry commands in the global scenario, which is evident while meeting representatives of the government, tourism boards, film commissions as well as film industry professionals from various countries. And the admiration for the Indian film industry only multiplies further when they learn of the circumstances under which the industry managed to not only survive but also sustain growth.

Indian films and the industry’s iconic film stars have always enjoyed massive popularity and have had a huge impact across the globe, even among those who have never visited India or can’t even speak any of the Indian languages. The film industry has therefore aptly been called a cultural ambassador of India by some political leaders.

It is true that the Indian film industry has essayed an important role in many areas directly and indirectly contributing to the growth and development of our economy, particularly since the early 1990s. The industry has undoubtedly been the apostle of steady progress for India, even in these troubled times of global recession and slowdown. It has well and truly justified the tag of ‘soft power’ allocated to it by proving its mettle when most of the core sectors have not performed to their potential.

If we need to grow – and I truly believe we must – then the question is of the real potential the Indian film industry has and how we can take on giant film industries in the world on economic parameters rather than emotional tags.

In my view, there are two most successful film industries in the world that are very different in their approaches yet they follow one common dream i.e. ‘growth’. On one hand, there is the US film industry or Hollywood, which is purely driven by market forces without facing restrictions or curbs from governments. On the other hand, there is the most exciting and much talked-about success story of the Chinese film industry, which clearly demonstrates that even in a highly controlled and restrictive regime, such success is possible if a determined government decides to support the industry with a clear mandate to develop the industry in a defined time frame.

There cannot be a bigger contrast between India and China, in respect of the holistic mechanism of running the film industry despite broad-based similarities in terms of restrictions, permissions and multiple bureaucratic controls. The government of China has endeavoured to revitalise their systemic processes in order to promote and incentivise the industry, whereas our establishment, notwithstanding its best intentions, has unfortunately not succeeded in extracting the hugely untapped talent pool of the Indian film industry.

It is here that the current regime needs to step in and reduce red tape in approvals through single window clearances in more and more Indian states, initiate beneficial tax lowering measures to mitigate the onerous burden on the industry in the form of multiple taxation and above all radically change its outlook and mindset towards the industry from SIN industry to a GOOD industry.

Over the decades, the potential and the contribution of the film industry has been undermined by various restrictions and curbs imposed. The industry is not asking for special favours from the government but simply asking to only make things easier and better for the film industry by removing unnecessary hassles of restrictions at multiple levels to unfair taxation regimes and this is what every sector of economy probably needs.

However, many more reforms need to be enunciated in order to satiate the long standing demands of the film industry. There was a growing urgency to break the stranglehold of restrictions imposed on the industry due to age-old procedural hassles and most of the restrictions currently cater to a segment which is less than two per cent of the country’s population by way of exhibition of films in cinema halls.

The backbone of the film industry has been viewing of films in cinema halls and in my opinion it is an experience in itself and we need to rejuvenate the existing ecosystem through a structured and well devised policy for more and more people across income groups to experience cinema.

Over the years, the building of cinema halls has been severely hampered through archaic processes, cumbersome permissions and laws and a generic apathy and lackadaisical attitude at times by the administration. This environment has also contributed to the slackness and decline in the exhibition business, which was the catalyst for economic boom post the advent of multiplexes which proved to be a game-changer for the film industry as a whole.

The biggest film industry which churns out films in around 30 languages and prides itself on a rich heritage and history of over 100 years has been facing a host of outdated operative methodologies and administrative hindrances to branch out to a larger section of our population across a wide spectrum of age and income groups.

The paradox of the tax situation with respect to the Indian film industry can be amply illustrated through the largest indirect tax reform being expedited and finalised by the Central Government – the Goods and Services Tax (GST) – which has not been able to fully redress the multiple taxation issues confronting the Indian film industry (entertainment tax jurisdiction has been transferred from state governments to local government authorities merely changing the goalposts for the industry) and thus obfuscating the very purpose of GST as a uniform single tax structure. To further accentuate problems, the fundamentals of operating GST through Goods and Services Tax Network (GSTN) framework for the film industry seem to be more complex and troublesome.

Let’s not forget the indirect economic contribution made by the film industry in many other sectors. Historically, it has been proven that there is a proportionate positive correlation between cinema and tourism, where promotion of cinema in a picturesque locale has a multiplier effect on the tourism industry So when the Central Government has encouragingly decided to throw open various sectors for Foreign Direct Investment in its objective to make our country a viable investment destination, and thereby gain invaluable foreign exchange, it must lay down the gauntlet to foreign producers to invest in co-productions with their Indian counterparts in the form of offering subsidies, tax incentives and state-of-the-art infrastructure.

The government must also exhibit an inherent willingness to open channels of communication with luminaries and experts from the film industry to discuss critical matters having significant consequences for the industry such as logistics, hygienic and other rudimentary problems encountered whilst shooting in India.

The need of the hour for the government is to adopt a more positive and congenial approach to the Indian film industry by advocating more reforms to remove restrictions and roadblocks both in the funding/financing of films and creating a healthy and level playing field for all stakeholders irrespective of their aura and volumes in the production-distribution-exhibition chain through progressive initiatives for creating a no adversarial tax regime.

We, as an industry, need to come out of the perception merely as entertainers. The fact is that the film industry has created enormous wealth for the nation in the form of intellectual property which needs to be respected and protected through stringent anti-piracy laws and enforcement.

India is the largest producer of films in the world as proven statistically, with patronage among the huge demographic in and outside India. ‘Digital India’ has emerged as a viable option to remove geographical boundaries and obstacles hitherto impeding the smooth functioning of the industry. This positive mood of vibrancy and enthusiasm amongst the stakeholders of the film industry has been further boosted by various positive initiatives of the Central Government such as Digital India.

The time has come to speed up the industry engine to the next level in order to boost its revenues which despite growth in numbers has shown a qualitative stagnancy. I honestly believe that to usher in real value-added growth, there is a burning need to create a conducive environment to promote ingenuous creativity and widening the scope and dimensions of the existing distribution channels.

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