Finally an industry

The film industry can finally look forward to becoming one. It has pointedly termed itself an industry for decades but behind that dignifying epithet lurked a shadowy business that could be hardly termed respectable. No bank would advance it money. No state government was sympathetic to its argument that high taxes were killing its markets. To offset rising production costs, the industry was forced to borrow at usurious rates and, it is reported, to serve as a money-laundering operation. Production houses which could not accommodate these new realities swiftly went out of business. The ones who could found themselves in a nightmare situation, for the inflow of hot money brought in its wake the unwelcome attentions of the mafia.

The turning point was the murder of Gulshan Kumar, which vividly showed that the mafia had become an integral part of the industry. The insistent denials of industry leaders like Mahesh Bhatt of links between the industry and the underworld betrayed the fact that all was not entirelywell. But even before that, it had been common knowledge that the industry8217;s profit margins often owe as much to money-laundering as to commercial enterprise. An investor may show a return of 100 per cent on a film but in reality, he will have put in twice as much as his declared stake in the first place 8212; in black money. His quot;profitquot; is his own money, laundered white. Alternatively, where the black money component is not very large, there is the imposition of a rate of interest which is beyond the ken of banking 8212; even Indian banking. Over time, such a system is bound to tell on the culture of an industry, and it is no wonder that film-making has come to be closely associated with the mafia. Now, the granting of industry status will hopefully make transactions more transparent. Initially, banks are bound to show an instinctive resistance to going into films, which are notoriously high-risk ventures. But the fact that Sushma Swaraj has indicated that institutional funds will be available to the industryshould help speed the process.

With the recognition of the film industry, its dependence on dubious sources of funding will hopefully end. The government agencies which replace them will call for more accountability from the industry. They will also be far more successful at persuading the government to address the industry8217;s needs than the film-makers, who have been banging their heads against a brick wall for so long. And with a new regime in which real investments are expected to lead to real returns, production houses will be under pressure to perform. Their works will have to be commercially viable. Quality will have to be given precedence over quantity. Film-makers whose only assets are a handful of wet-look women and some ridiculous belly dances will simply go out of business. But as government becomes more involved in the monetary aspects of the industry 8212; lending, taxation, export promotion 8212; it must stay clear of other aspects of the industry. Especially, it should put its censors out to grassand withdraw from the role of the watchdog of public morality. All that this industry needs is to be assured the right to operate in a healthy business environment.