Bollywood gets the budget blues
Tuesday, March 06, 2007 15:13 IST
By Santa Banta News Network
The Indian film industry is unhappy that the latest budget has once again failed to address its demands of curbing piracy and uniformity in entertainment tax in different states.

"I think the finance minister is clearly stating in last year's and this year's budget that please don't expect any radical changes, breaking news and do not expect it to be 'an event'," said Ronnie Screwvala, CEO of production house UTV.

"Specifically for the media there is nothing, though. We were looking for some parity between the print media and the electronic media."

Budget 2007-08, which was presented Feb 28, has only come up with one significant announcement for the entertainment industry - a reduction in customs duty on digital cinema infrastructure equipment imports from 12.5 percent to 7.5 percent.

This is expected to boost the adoption of digital technology in theatres.

However, many in the industry are saying that key issues have not been addressed.

"We were looking forward to the budget and hoping that government would focus on the entertainment business but once again it was ignored. Of course, we are disappointed," Sandeep Bhargava of production house TV18 told.

"Also, we wanted the government to help bring uniformity in entertainment tax. In some states it is 25 percent, in others it is 100 percent or more," added Bhargava.

But Amit Khanna of Adlabs rules out government's interference in the Indian entertainment Industry.

"The industry is doing so well. We don't need government's interference. Having said that, we were expecting government to do something for the broadcasting sector especially when we have these set top boxes," Khanna told.

"As far as the entertainment tax is concerned, it has nothing to do with the union budget. It is a matter to be sorted by all the states individually," added Khanna.

The Indian entertainment sector, which is almost synonymous with the Mumbai-based film trade better known as Bollywood, had witnessed phenomenal changes after it was granted "industry" status by the government in 2001.

The size of the entertainment and media sector in India is currently estimated at Rs.353 billion and is expected to grow at a compound annual growth rate of 19 percent over the next five years.

The entry of financial institutions like IDBI Bank, Bank of India, State Bank of Mysore and IndusInd Bank-Hinduja TMT combine for funding and multiplexes, which are flourishing, are the best example of the growth.

The sector was, however, hoping for the removal of policy-related impediments to its growth. But this, say insiders, has not happened in the latest budget.

The imposition of service tax on development and supply of content for use in advertising agency services is not expected to have any significant impact on the sector.

Screwvala said: "The introduction of service tax for content related to advertising agencies and telecom needs to be studied in the fine print."
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