The wave of demonetisation may have hit the Malayalam film industry in more ways than one.
A sudden drop in the use of unaccounted money would be a natural reaction, but the Centre’s decision to scrap Rs.500 and Rs.1,000 currency notes is definitely going to increase the burden on producers.
“The lead crop of actors will now prefer a safer route to get their pay packets. The front runners already collect service tax on their salaries from the producer. An actor charging Rs.1 crore has to be paid an additional sum of Rs.20 lakh, which is collected from the producer to pay service tax. In short, the actor’s pocket remains safe while that of the producer bleeds heavily,” says a senior member of the Kerala State Film Producers’ Association.
With tax nets looming large over their heads, an increasing number of actors will now switch to the wise option of charging the tax amount as a separate component of their salary. The producers will also shift to a safer route by accepting funds from financiers either as demand draft or through a legalised money transfer format.
Industry insiders say that Malayalam film industry continues to depend on financiers in the State and outside for meeting a lion’s share of the budget. A producer of a recent hit movie pointed out that an average Rs.3.6 lakh is being paid as interest monthly on a loan of Rs.1 crore taken from a financier.
“Nobody wants to take a risk these days. Most financiers now transfer money through legal routes,” he says.
Tomichan Mulakupadam, producer of the mega hit movie Pulimurugan, was trolled on social media on how he would handle the Rs.100-crore earnings. But, he was candid enough to admit that exhibitors remit the collections at banks and he had nothing to worry about.
A senior member of the Kerala State Exhibitors’ Federation says the collections are deposited at the bank in a cycle of every two weeks.
“Interestingly, an overall alertness on fund utilisation has crept into the industry,” he says.
G. Krishnakumar
