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Finally, there’s a biz like show-biz
They are, to put it mildly, highly entertained. With the Union
Ministry of Finance notifying that the entertainment industry
had been recognised, under the IDBI Act, 1964, as an approved
activity under ‘industrial concerns’, the badshahs
of Bollywood and Tellywood are sporting 70 mm smiles.
After being given industry status in May 1998, this is probably
the biggest announcement for the entertainment industry. For,
getting approval under the IDBI Act indicates that entertainment
and film now has a level-playing field in terms of accessing
bank loans and other facilities such as insurance.
According to a Ministry of Finance official, 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 concern’
under the IDBI Act, the industry can easily access loans not
just from the IDBI, but also financial institutions such as
the ICICI and IFCI, which come under the Companies Act.
The new-generation entertainment companies - who are targeting
IPOs as a source for raising funds, also experience a sense
of relief. Ekta Kapoor, Director, Shree Balaji Telefilms,
says, "The institutions will look at us more favourably
now. We have just gone in for a public issue and are optimistic
of greater FI contribution the next time we hit the market."
The television channels too rate it as a positive development.
L.S. Nayak, Executive Vice President, Sales and Marketing,
Star, says, "It’s the best thing that has happened
to the industry so far."
Significantly, the legitimate source of funding is expected
to finally drive out the suspect money which had trickled
into the industry. According to the COO of Jain TV, Sunil
Gupta, the underworld’s connection would get sidelined
after this development. He said, "With easy access to
funds, the entertainment industry will become more transparent.
Getting easy finance for film projects will mean that the
underworld, for which the film industry is infamous, will
get sidelined."
Gupta also felt that software exports would become easier
for TV channels. "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," he added.
Ajay Nijhawan, CEO, Modi Entertainment Network, which is a
distribution agency for pay TV channels, said, "Earlier,
a lot of financial institutions had reservations on financing
projects for the entertainment industry. But now, more and
more FIs will be open to the idea of sanctioning loans to
this sector."
Another TV player - TWI, which is a software provider for
various television channels, saw the move as a positive development
in furthering ‘entertainment’ as an industry. Said
a spokesperson for TWI, "The entertainment industry is
poised to grow from its present figure of Rs. 200 billion
to Rs. 600 billion over the next five years, and we are pleased
that the centre has recognised this."
But of course, there’s always room for more. Film producer
Mukesh Bhatt refuses to exult too soon, "Nothing has
really happened after the announcement in 1998. I am not fully
convinced about this decision. Till the industry gets funding
on the basis of its credibility and stature, any decision
of this kind will remain only meaningless."
Nivedita Mookerji and Krishna Gopalan
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