Union Budget 2015: Film industry will ride on the growth story of India

An inclusive Budget where the focus is on the empowerment of the less privileged people of India, the film industry will, in the long run, ride on this growth story of India as a whole.

More disposable income in the hands of more people will generate greater demand for entertainment content.

Further, since distribution of films in India currently targets (and reaches) only a minuscule portion of the country's population, the enormous potential for growth in terms of audiences (and earnings) can only benefit from the government's commitment to a Digital India that will, among other things, change the game of distribution of film content in the coming decade.

In the short term, the cost of production of films will increase due to the proposed enhancement in rate of Service Tax from 12.36 per cent to 14 per cent while the reduction from 5 per cent to nil in basic Custom Duty on digital still-image video cameras and its parts will benefit the industry marginally.

As such, we can expect an enhancement in costs of film production across the board, at least until GST is introduced in April 2016, as proposed in the Budget.

The protection of world heritage sites and enhancement of visa-on-arrival facility from 43 to 150 countries are indicative of the intent to give tourism an impetus, which would also benefit from film tourism, as is the case in several other countries.

In this context, the introduction of the concept of 'Plug-n-Play', to improve ease of doing business in India, where the current practice of multiple permissions shall be substituted by the issuance of guidelines and a regulatory mechanism, portends the possibility of similar mechanisms of clearances being developed across central and state governments for on-location film shoots, making India an attractive filming destination.

With Permanent Establishment (PE) norms being modified, and the anticipated consequent increase in the presence of fund managers in India, hopefully, going forward, funds would also look at infrastructure in the film sector as a potential investment opportunity.

It is a much-needed step in a country that has an acute paucity of screens, especially in category B and C cities/ towns, as also in training facilities, of which there cannot be enough given our vast, diverse, and burgeoning film sector with its enormous economic potential.

The proposed centre for Film Production and Animation in Arunachal Pradesh is, therefore, more than welcome. The geographical location is particularly exciting as in recent years north-eastern states of India have witnessed a growing film industry, with albeit small films made for local consumption, but nevertheless contributing to the linguistic and story-telling diversity of the vibrant Cinemas of India.

(The author is Managing Director, National Film Development Corporation)