Bollywood and Indian Government

Indian government is learning about the potential of Bollywood;

“But from 2001 onwards several steps were taken by the government to boost the business and the first move in this direction was taken when Reserve Bank of India's (RBI) allowed bank finances for films.

After suffering for decades in the hands of traditional financers, Indian film industry, especially Bollywood, witnessed a phenomenal change after the entry of banks.

'Through our vigorous efforts, we have been able to reduce the level of entertainment tax. We have simplified procedures and reduced the time required for granting permission to shoot foreign feature films in India,' Information and Broadcasting Minister Priya Ranjan Dasmunsi said in the Lok Sabha recently.

Entry of banks into film business lured corporate players like UTV, Percept Picture Company. Their entry ensured the quality of films, ample opportunities for wannabes and variety. For independent filmmakers, it turned out to be a blessing in disguise, because they could speak their mind through their craft.

Apart from that, entry of Non Traditional Financing Sources (NTFS) has boosted the business and profits started moving toward record levels.

According to Yes Bank Survey reports conducted till 2004, the number of films partially or fully financed from one or more NTFS has increased from six in 2001 to 46 in 2004.

Cumulatively, NTFS contribute Rs.2.56 billion in 2004 as compared to Rs.485 million in 2001. This constitutes more than 50 percent of total project outlay of top 50 Hindi films produced and released in 2004 and underlines the rapidly transforming funding sources for Hindi films.

Not only that, 20 out of 46 films financed from NTFS in 2004 were associated with the new directors which points towards the role being played by NTFS in nurturing and developing new talent in filmmaking.

And 61 percent of films financed from NTFS were funded by private equity from individuals and corporate houses. Apart from that, 93 percent films funded from one or more NTFS in 2004 involved equity financing.

The trend continued this year with UTV producing big hits like films 'Rang De Basanti', 'Krrish', 'Khosla Ka Ghosla' and Percept Picture Company churning out 'Dor', 'Corporate' and 'Malaamal Weekly'.”