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Make cinema an industry, Centre tells states; market awaits transfer to concurrent list

Information and Broadcasting Secretary P G Mankad has urged all states and Union Territories to recognise cinema as industry so that problems like financing and taxation can be institutionalised.

Addressing the secretaries of information and cinematography from different states who are in New Delhi to attend the 23rd state information ministers meet tomorrow, Mankad requested them to consider bringing greater uniformity in entertainment tax so that the quality of films can be improved.

Mankad assured the states that bringing cinema on the concurrent list of the constitution will not mean impinging in the authority of the states, but to help greater coordinated steps to tackle problems like video piracy.

Referring to television, Mankad asked all states to set up regulatory mechanisms to properly implement the Cable Operators (Regulation) Act. He also said cable operators in all states should be asked to show the primary channels of Doordarshan on their networks.

In a reference to the print media, Mankad revealed that the law ministry had opined that in cases where titles have been registered but publication has not commenced, the titles can be de-blocked after giving due notice to the person who has blocked the title.

The menace of video piracy, which is eating into the vitals of the once-buoyant indian film industry, and rationalisation of thetax structure, will be among the main points on the agenda of the meet.

Against this backdrop, the captains of the Indian film industry are looking on with anticipation to see whether the meet will really result in transfer of cinema to the concurrent list of the Constitution.

Although cinema has been recognised as an industry by the Union government, senior film-makers feel this will have little meaning if it remains a state subject and the Centre has no say. It is felt that the menace of video piracy, which is eating into the vitals of the once-buoyant Indian film industry, and rationalisation of the tax structure can only be looked into if the Central government has the freedom to decide on film policies.

This is the first time that cinema will be the main focus at the state information ministers conference. The one-day meet, will be inaugurated by Information and Broadcasting Minister Sushma Swaraj.

The meet will also discuss ways to provide institutional or bank financing for films, the grant of industry status at the state government-level, enforcement/amendment of the Copyright Act, and reduction and rationalisation of entertainment tax by states and Union Territories are among the other subjects at the meet.

Production and co-production of documentaries, short and animation films by the films division on subjects related to state governments, and exhibition of children's films through state government exhibition outlets will also be discussed.

In addition, the delegates will take up some issues relating to other matters, like de-blocking titles of newspapers/periodicals which have been verified but not published, and the need to integrate public efforts and resources of the Central government media units with state publicity machinery. The enforcement of the Cable Television Networks (Regulation) Act 1995 will also come up for discussion.

Although several concessions were given to the film industry in the recent budget, industry leaders say that two other demands are still pending: the counterveiling duty on raw film stock is illegal since the Hindustan Photo Films does not make colour stock in the country, and benefits should be given under Section 80 HHC of the Income Tax Act as the filmmakers also exported films and earned foreign exchange. The government recently also approved the concept of setting up a museum of moving images for Indian cinema and Mankad was asked to take further steps in this direction.

Earlier, Swaraj had written to state chief ministers seeking their views on the issue soon after the Centre announced the recognition of Indian cinema as an industry. She also sought the views of the states about rationalising the entertainment tax structure for cinema, which ranges from 66 per cent in some states to 150 per cent in some others.

Representatives of the film industry agreed that it was for the industry to make their product marketable and 'bankable', and ministry sources said a meeting of the film industry and the Federation of Indian Chambers of Commerce and Industry would be held shortly to discuss the issue of making the films marketable.

While there is no proposal in the ministry to set up any financial institution for funding of production of films, the ministry has initiated proposals with the primary objective of making film production eligible for institutional and bank finance.

The finance ministry has been asked to include production and allied activities in the list of activities eligible for institutional finance. Recommendations have also been made for rationalisation of certain taxation issues which have a bearing on the film industry.

Realising that it was for the industry to make their product marketable and 'bankable', a meeting of the film industry and the Federation of Indian Chambers of Commerce and Industry is to be held shortly to discuss the issue of making films marketable.

The I&B ministry is also taking steps to combat video piracy. But the nagging problem is that it comes under the Copyright Act which is a matter relating to the human resource development ministry, and under the states in the matter of policing and law and order.

The minister has set up three different bodies to help the cinema in attaining the entity of an industry. They are -- advisory committee with nine members and is headed by the minister herself and a 39-member Film Development Council and a 29-member Film Export Forum, both headed by the I&B secretary.

The FDC which has a term of one year will suggest ways and means for sustained and all-round development of the film industry and recommend ways for improving and upgrading the technological and qualitative aspects of Indian cinema. The export forum will consider ways of improving exports of films, television software, music and other forms of audio-visual entertainment products in a coordinated manner.

The members of the Advisory Committee are: Dilip Kumar, Yash Chopra, Bhupen Hazarika, Aparna Sen, Mani Ratnam, D Rama Naidu, Adoor Gopalakrishnan, Shatrughan Sinha and Shabana Azmi.

Meanwhile, the film industry has been given several concessions as a follow-up to the government's decision to recognise it as an industry. These include the reduction in the customs duty on the jumbo rolls of cinematographic film to ten per cent from the present 25 per cent. For a film released on commercial basis at least 90 days before the end of the previous year, full amortisation of the cost incurred on production or acquisition of distribution rights of the film will be allowed in the year of release itself. Until now, this limit was 180 days, and no amortisation was allowed if the film was released later.

Producers will now have to give information only about payments made by them which are over Rs 25,000 in any financial year. Until now, filmmakers had to report payments over Rs 5,000. Recorded audio and video cassettes have also been exempted from excise duty, but has increased the excise duty on unrecorded audio cassettes by three per cent to 13 per cent.

UNI