Budget 2021 Ignores $.2.8 Billion Film Industry - SP Cinecorp

Budget 2021 Ignores $.2.8 Billion Film Industry

When finance minister Nirmala Sitharaman announced the 2021-2022 budget on February 1 recently, it was met with great disappointment within the film industry.

Considering the critical times the industry is facing, there was a high expectation from this year’s budget in terms of stimulus packages, reforms, and relief measures to boost the morale of the film industry. Unfortunately, the film industry failed to get attention in the budget.

The movie business has been impacted severely by the pandemic the world over. But India is the largest film producing country in the world. The Indian movie industry produces 1500-2000 films on an average annually. Of these films, nearly 300 are produced by the Hindi film industry alone, accounting for more than 40 percent of the industry’s revenue in India.

It is also widely believed that the Indian film industry has an export market, next only to the US. This market and demand for Indian cinema whether it is Bollywood hits like Dangal or regional films, has been steadily rising. The foreign market for Indian films is quite expansive from China to Africa, Middle East to the UK, and the US.

Considering that films comprise a major chunk of earning foreign exchange for any nation, the Government needs to realize the potential of our film industry and act accordingly.

Currently, the film industry in India, like many other sectors, is struggling thanks to the disruption caused by the pandemic. Just the film segment is expected to contract by 67% percent in this financial year. As 2020 witnessed one of the biggest pauses in the filming and entertainment business, the sector saw unprecedented losses in revenue and income after the prolonged lockdown.

Trade experts and movie analysts have estimated the losses to be to the tune of Rs. 2000 crore or $284 million for the film industry since March when the shutdown was imposed.

The budget has snubbed not only film-makers but also theatre owners. Cinema hall and multiplex owners were expecting some relief and better terms for running their businesses at lowered costs with a waiver in some taxes or reduction in electricity and maintenance fees.

In fact, a film industry delegation led by Sunny Deol had met with the FM in January to propose measures for reviving the film industry. However, despite assurances from the finance minister, the film industry didn’t even merit a mention in the budget.

Elsewhere, countries have set an example by announcing relief and concession measures to help jumpstart the film industry. In the UK, a £500m fund was announced to help UK film and TV by the Government.

This scheme is aimed to help cover the cost of projects that are delayed or abandoned due to the lockdown. Similar, bailout packages have been announced in Europe and Canada.

There’s of course a silver lining in every cloud. In December 2020, the reduction of GST on movie tickets was announced. This falls under the GST Council and the central Government.

Now there is a ray of hope from the state governments. A majority of Indian states levy huge entertainment taxes and a reduction in these can significantly improve the bottom-line profits for all stakeholders.