Former Censor Board of India Chairman, and President of the India Motion Pictures Producers Association (IMPPA) Shakti Samantha, is hopeful that the Union Government will facilitate the process of film producers borrowing from financial institutions as promised by the then Union Minister for Information and Broadcasting Sushma Swaraj in 1999.

Swaraj's move to recognise the Hindi film industry as an industry and to liberalise proceedings for disbursing loans to Bollywood producers from financial institution has yet to become a reality, according to Samantha.

Film piracy has been creating havoc in the industry. Samantha believes that the delay in dispensing justice by the courts is the cause for this havoc. Samantha claims that since IMPPA does not have the resources, it is difficult to fight piracy. He accuses the police for conniving with cable operators who enjoy political patronage.

The Union Government, when declaring the film industry as a recognised industry, had announced that the Government would relax the process and conditions for obtaining loans from financial institutions. The aim of this decision was to block mafia syndicates from laundering their tainted money through Bollywood.

"The union Government did announce this move and since then we have been religiously following it up with the Information and Broadcasting Ministry. We have taken up this issue with Ms. Swaraj and have even met the current Information and Broadcasting Minister Arun Jaitley. Since the announcement, all we have received are assurances from them."

Shakti Samanta in conversation with Mani D'Mello:

What you are saying is, Bollywood is not convinced that the Government will seriously implement its decision to recognise the film industry as an industry and relax the criteria for availing loans from financial institutions, for film productions.

We all hope that the Government will sincerely pursue its own decision. The Government's assurance helps in keeping our hopes alive. At this moment we want the Government to give us a concession on power tariff. Now that the Government has declared the film industry as a recognised industry, we should be charged the tariff of a domestic user and not a commercial user. This industry consumes huge amount of electricity and with the spiralling prices of electricity, the film industry is being milked dry of its financial resources. We have put up this demand before Jaitley and we hope that he considers it.

Since there is not much finance coming easily from financial institutions, some producers are known to rely on finance coming from
mafia syndicates.

I am unable to comment on mafia syndicates financing some film productions, since I do not have evidence. Obtaining loans from financial syndicates is difficult and hence producers take loans from private financiers at an interest rate of 2 percent per month.

I believe that banks are not interested in financing a project unless they are assured that their loans are secured. One has to be in a position to furnish a personal guarantee,only then will the bank dole a loan. Banks will not insist on guarantees provided your earlier film productions were super-hits at the box office.

It is not that banks never give loans to film productions. But then if a bank doles a loan, it will only be if 60 to 70 percent of the production equipment is hypothecated to the respective bank.

Generally a producer gets a profit margin of around 10 to 15 percent, if the film is a success at the box office. If the movie flops at the box office, the producer is at the mercy of the money sharks from whom he has borrowed.

Even though there is an economic recession and banks are not easily willing to dole out loans to film productions,
a number of films are released every month.

You must be referring to low budget films in which smalltime starlets and upstarts star in. Such films cost around Rs 15 lakh to Rs 20 lakh. Most of these films have a lot of pornography. These low budget films are screened in rural areas and small towns, where the long arm of the Censor Board cannot reach.

When I was on the Censor Board, I would deal with distributors who would edit objectionable parts before the Censor Board could use its scissors. Once the Censor Board cleared the film for public screening, they would reload the edited part and screen the film in places where the Censor Board had no reach.

In South India, there were films screened in theatres, with bogus Censor Board certificates. When this came to light, the Censor Board got the local police to raid these theatres and register cases against the accused.

What about film piracy? Is Bollywood severely hit by piracy?

Yes. Not only the industry but even the Government. On account of piracy, the Government loses out on revenue collections like entertainment tax and other direct taxes.

A large number of cable television operators which enjoy political backing are behind this film piracy racket. The police's contention for not acting on piracy is that tackling law and order and organised crime is their main priority. They expect the various producers' associations to be vigilant against piracy. Bollywood producers lack resources because they have been severely hit by the economic recession. We cannot afford to maintain a vigilant squad to keep a tab on film piracy.

Author name: Mani D'Mello

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