Union budget disappoints Bollywood as Arun Jaitley gives film fraternity a miss

There are three issues high on priority for the film fraternity that Bollywood had hoped would be addressed this year in the Union budget


Bollywood’s box-office collections in India had dropped by 10-15% in 2016 as compared to those of 2015. Photo: HT
Bollywood’s box-office collections in India had dropped by 10-15% in 2016 as compared to those of 2015. Photo: HT

New Delhi: The film fraternity was disappointed by the Union Budget presented by finance minister Arun Jaitley on 1 February as the sector, formally granted industry status as far back as 1998, found no mention. “We shouldn’t be really surprised or complaining though,” said Atul Mohan, editor of trade magazine Complete Cinema.

“The government holds meetings with leaders across industries at least a couple of months before budget day to discuss their issues. I don’t think anybody from the film industry was asked to come and share their concerns.”

To be sure, there are three issues high on priority for the film fraternity that it had hoped would be addressed this year in the Union budget.

First is the unreasonably high entertainment tax levied on movie tickets. The total theatrical collections of a film only make up the gross figures. Once the entertainment tax is deducted, the remaining sum is called the net, which is divided among producers, distributors and exhibitors.

A state subject, the tax peaks as high as 40-60% across states, ranging from 40% in a state like Uttar Pradesh to 15% in Tamil Nadu.

“It definitely makes people think twice before purchasing a ticket and is killing the movie business,” said film trade and business expert Girish Johar. “Cinema-viewing is not a premium activity in our country.”

Second are the challenges faced by the exhibition sector. From lack of land rebates, electricity concessions and a tedious licence renewal process embroiled in red-tapism and often costing as high as Rs 2 lakh in case of single screens, the woes for theatre owners, anyway under stress, are many.

On 12 January, 2017, Mint reported that box-office collections in India had dropped by 10-15% in 2016 as compared to those of 2015.

That is a grave problem for a country severely under-screened in the first place. According to the KPMG-FICCI report of 2016, India has more than 8,000 screens (including over 2,000 multiplex screens) with a screen density of six per million people, compared to 23 per million in China and 126 per million in the United States.

Mohan mentions there is a need for an exhibition policy modelled on China which accords various benefits to theatre owners and has managed to up its screen count from 9,000 to 27,000 only in the last three years and is looking to close 2017 with 35,000 cinemas.

Lastly, there is a need for a national policy and related benefits when shooting across India, especially in smaller towns.

Currently, the Uttar Pradesh government offers a refund of Rs 2 crore to a film production team working in the state. “Other states should follow,” Johar said.

“Permissions for shooting should be a single-window procedure. And especially when we have benefits to shoot in B and C centres will we look beyond the big cities and embrace new milieus and storytelling.”

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