Ahead of the Union Budget, the Indian media and entertainment industry, which has an annual turnover of over Rs 8,000 crore, has a wish list for finance minister P Chidambaram. The expectations include softening of the entertainment tax regime and single-window clearance system for film shooting domestically. The film fraternity also expects the entertainment tax on animation films to be lesser than the mainstream Hindi films.
Navin Shah, CEO, Integrated P9, expects the government to lessen the entertainment tax on animation films. ?Currently, Hollywood outsources animation production from Indian studios, which is an indication that India is a huge and an important market. Secondly, the animation film producers have to give one-third of the box office collection to the government in the form of taxes, which burns a hole in the producers? pockets. He adds that if the taxes are reduced, the receipts of the producers will increase and they can further invest in other projects.
The production of animation films is more time consuming. It takes nearly more than a year to make an animation film and the budget is high with minimal returns due to the 35% tax on the box office collection of the film. ?The government must consider giving some concessions to animation film makers,? Shah says.
?I expect the entertainment tax on film tickets to be revised. Currently, it is 25% of the cost of the ticket. The steep tax structure is eating into the profitability of the producers, distributors and the exhibitors,? says UTV Motion Pictures? COO Siddharth Roy Kapur.
The television industry also has some issues that the government should consider while announcing the Budget. The Film & Television Producers Guild of India Ltd wants the government to introduce one-window clearance system for getting permission for shooting of films or television serials. ?Currently, hardly any state in the country has a one window clearance system. It is extremely difficult for the producers to run to several departments for getting an approval for shooting at a particular place. It delays the production,? said a television serial producer.
The global media and entertainment industry is expected to grow to almost $ 2 trillion by 2008. The growing integration between the Information Technology and media has led to more personalised consumption of entertainment services through mobile, PCs and ipods. This movement is expected to expand and develop even more in the coming years.