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Untapped soft power: Why the film industry requires adequate government support

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Despite its potential to create revenue and goodwill, the movie business is still far from being recognised as an important sector for the government

Last year, Union Minister Ravi Shankar Prasad cited the earnings of three blockbuster movies to dismiss the economic slowdown. He went on to suggest that the film industry is largely immune to the recession that is slowing down other major industries. He is right about this. A PWC report states that the media and entertainment industry outperformed expectations in FY19 and was amongst the fastest-growing sectors with a growth rate of 13%. India produces the maximum number of films in a year worldwide.

Despite this, it is still far from being recognised as an important sector for the government. Initially, under the Goods and Services Tax regime, the film industry was slotted under the ‘luxury’ category. A tax rate of 28% was imposed on it. After an outcry, this was revised to 18%. However, GST poses a challenge: if a particular movie appeals to a State government, that government can grant ‘tax free’ status to that film. With the GST in place, States can waive off the SGST (9%) alone. Therefore, a movie deemed ‘tax free’ is still be liable to pay CGST.

Lack of infrastructure and courses

Deeming the entertainment sector as a ‘luxury’ sector undermines its soft power. The president of the Producers Guild of India, Siddharth Roy Kapur, observed how the spread of American content helped create desirability for the American dream and way of life and how this further cemented the hegemony of the U.S. The soft power of the Indian industry is seen in the many public service messages and political campaigns that use film actors to propagate their messages.

Yet, India lacks the infrastructure to take films to interior areas. For a population of 1.37 billion people, India has less than 10,000 screens, of which 6,700 are single screens. The procedure to convert a single screen theatre to a multiplex is tedious and costly. New permission and licenses are required, and existing licenses often hold little value. In stark contrast, China has about 60,000 screens for a population of 1.4 billion. These were created over the last decade with government support in the form of public-private partnership models, which makes the country a viable market for foreign film industries as well. This has created revenue for the Chinese government as foreign films have to share a sizeable amount of their profit with the state. Ironically, films set in the interiors of India, such as Secret Superstar and Dangal, have more footfalls in China than they do here. A large portion of the Indian population does not have access to the content that is derived from them.

The Hindi film industry was accorded industry status only in 1998, even though the first Indian film was made in 1913. The industry employs a vast number of technicians and creative professionals. But there are no formal guidelines for courses related to the film industry. The government created the Film and Television Institute of India, but its curriculum is not binding on other private film schools. There are barely any government academies catering to the industry. In contrast, film education in the U.S. is accorded the same importance given to journalism or biotechnology.

Not enough incentives

Much like the U.S., India allows its States to decide incentives for film shoots that take place within their territories. American states provide incentives such as tax shelters, cash rebates and grants to productions taking place in their territories. During a film shoot, the location gains tourist attention. Films also generate seasonal employment by hiring local staff and parts of the crew. It is a lucrative venture to have a film shoot at site. It is because of this that countries like the U.K. and Malta provide incentives such as easy clearances and rebates upto 30-40% of the total cost of the projects filmed there. In India the incentives are much lower, and in most States the cash rebates are capped at nominal amounts which are not lucrative for big-budget productions. Moreover, though there is now a single-window clearance for shoots in many States, shooting at various spots such as archaeological sites requires multiple permissions and is a time-consuming and arduous process.

The film industry deserves more support for its growth and protection. With high export potential, the content created helps disseminate the uniqueness of India’s culture. Yet, there are hardly any support tools from the government. The risk may be high, but the returns are good. Various countries are realising this and working to either strengthen their content-creating industries or become viable destinations for hosting shoots. Tapping into the potential of this multi-seasonal industry opens a plethora of opportunities: from better international awareness about the country to creating employment opportunities within.

Damini Chopra is an actor

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Printable version | Feb 20, 2020 7:09:28 AM | https://www.thehindu.com/opinion/op-ed/untapped-soft-power-why-the-film-industry-requires-adequate-government-support/article30627501.ece

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