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Centre
grants showbiz ‘industrial concern’ status
By MSM Desai
In a significant move, the government on October 16 notified
that the entertainment industry, including films, has been
recognised, under the IDBI Act, 1964, as an approved activity
under the list of ‘industrial concerns’. The Finance
Ministry notification was released after the Information and
Broadcasting Minister Sushma Swaraj announced on October 18
that funding for the film industry would be easier from now
on.
After film was given the industry status in May 1998, this
is probably the most major announcement for the entertainment
industry. Getting approval under the IDBI Act indicates that
the industry can now access bank loans and other facilities
available to other industries. “Although the film sector
was given industry status earlier, banks and institutions
were keeping away from this segment due to several technical
and practical problems,” said a banker.
Sushma Swaraj and Union Finance Minister Yashwant Sinha, for
the first time, came on one platform provided by the Federation
of Indian Chambers of Commerce at the interactive meeting
of film and other entertainment industry representatives in
Mumbai on October 18. They said that accessing finances would
soon become easier for the industry.
According to an official of the ministry of finance , the
notification is significant because till now the IDBI Act
was the stumbling block in granting finances to this industry.
Now that the industry has been recognised as an ‘industrial
activity’ under the Industrial Development Bank of India
Act, the entertainment industry can easily access loans from
the Industrial Development Bank of India.
More important, with the industrial Development Bank of India
showing the way, other financial institutions such as the
ICICI and IFCI, which are companies under the Companies Act,
are also expected to jump into the fray. For the industry,
it is a win-win development.
The chief executive officer of Jain TV, Sunil Gupta, said
it was a very positive development, one which had been long
awaited. “It will not only lead to quality production,
but will also help attract serious players to the industry.
Another good thing about getting easy finance is that the
underworld, for which the film industry is infamous, will
get sidelined,” he said.
Television channels will also benefit from the move, according
to Gupta. For instance, software export will become easier
for them. He elaborated: “Now that many of the foreign
channels are becoming India-centric, money for software export
will be easy to come by for the Indian channels.”
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