Entrepreneurs and stakeholders voice their concerns and reservations
This week, the State Government unveiled its much-talked-about policy on the animation and gaming sector.
Akin to its previous policies for the IT, BT and hardware sector, this policy too primarily aims to attract fresh investments in this emerging field, with an eye on the services and outsourcing sector, and on building and training a skilled workforce to meet the projected demand.
With this policy, titled ‘Karnataka Animation, Visual Effects, Gaming and Comics Policy', the State projects an industry worth of Rs. 10,000 crore by the end of 2012, which it hopes will grow by at least 40 per cent by 2015.
However, industry members, many of whom have collaborated with the Government in evolving this policy, see the current version of the policy as a “work in progress”. A lot of the policy, particularly the parts dealing with venture funds and sops the Government has promised, is largely sketchy.
At the panel discussion and interactions that followed the celebrated unveiling event, entrepreneurs and stakeholders voiced their concerns and reservations about the policy. While some pointed out that in the absence of guidelines, a lot of this may remain on paper, others said that the allocations made therein were “all too paltry”.
For instance, the fund of Rs. 1 crore that has been allotted under the head of “promoting IP creation”, industry members pointed out, is “all too nominal”. Industry sources point out that on an average, a typical 90-minute film takes four to five years to create, and an investment of around Rs. 10 crore.
‘Lack of funds'
Ankur Bhasin, secretary of ABAI, agrees that the biggest issue facing the industry is paucity of funds. The current situation in the industry, he describes as a “chicken-and-egg” condition, where the predominant issue is the poor quality of IP being generated. “Now, the reason for this is the lack of funds for creating IP. So the quality does not meet international standards, and so naturally, the work does not distribute well,” he explains. This, he emphasises, can only be solved if some sort of Government support, in terms of tax breaks or even seed funds, is provided.
Mr. Bhasin explains that unlike other industries, creating content takes longer, sometimes up to five years. “During this period, it is important that a production house or company be able to sustain. Only if this initial part is taken care of can companies or entrepreneurs even think of working on original content,” he says.
More critical interventions by the Government, he adds, would be in sectors such as power, where animation companies (that operate large data centres and high-end computing units) have been demanding a shift in tariff patterns from industrial to commercial. Entrepreneurs feel that the policy should be more focussed on issues that are specific to this industry.
A key commitment by the Government is to promote public and private parks on the SEZ model and provide various fiscal incentives and concessions such as exemption from stamp duty, payment of entry tax for export-oriented enterprises, and establishment cost subsidies. However, industry members say that these have not been sketched out and there is little clarity yet on what the nature of these incentives will be. For entrepreneurs, the policy proposes the setting up of a venture fund worth Rs. 50 crore, with a Government contribution of 26 per cent.
Biren Ghose, president of the Association of Bangalore Animation Industry and country head of Technicolor India, says the venture fund intends to create a ‘garage culture', akin to the Silicon Valley model. “The model has already yielded results in the IT and Biotechnology sectors where research and innovation as well as commercial initiatives have been spurned by such funds,” he said.
Emphasis on training
The most significant and well laid-out part of this policy is the section that deals with setting up a Centre of Excellence, whichwill include a finishing academy-cum-incubation centre to be set up in Bangalore at an estimated cost of Rs. 50 crore. This, along with a post-production and digital intermediary facility (worth Rs. 30 crore), will include an incubation centre that will also provide small and medium entrepreneurs space to carry out their projects. This will be set up on a PPP basis, with contributions from the State (20 per cent) and Union governments (30 per cent).
Industry members are “extremely optimistic” about the skills training roadmap that has been sketched out. They agree that it can go a long way in creating jobs in the sector, particularly in tier II and tier III cities where digital arts is a largely unexplored field.
The policy lays out a proposal to identify 10 fine arts colleges to set up digital arts centres on a PPP basis.