The Indian film industry is hoping the government can come to its rescue with steps like wage guarantees and subsidies to help both producers and exhibitors, as it struggles with the latest curbs amid the third wave, offsetting the impact of the brief spell of recovery.
Theatre owners said they need easy renewal of licences, besides capital support and tax incentives to bring back old screens or restart new ones since India is an under-screened market. Producers have sought grants to kickstart stalled productions and covid insurance for crews. Always seen as a means of entertainment for the urban elite, the industry said there was urgent need to recognise the livelihoods impacted by frequent lockdowns.
“We can perhaps take some cues from intensive relief packages instituted in major film markets like the US, EU and UK that have employed a number of measures like wage guarantees and subsidies, compensation for covid-related losses, grants to kickstart stalled productions, tax breaks and deferments, and more,” said Nitin Tej Ahuja, CEO, Producers Guild of India.
The entertainment has been among the worst hit as far as facing covid-induced sufferings go, said independent exhibitor Akshaye Rathi. It is important to look at it as an industry that goes beyond national multiplex chains and generates employment for many who were left at the mercy of fate over the past two years, he added. These include employees at single screen cinemas across the country that sell tickets and other stakeholders such maintenance and security staff who may be have contractual arrangements or apparel and F&B vendors in and around the area whose business depends on footfalls in the cinema.
“Some contribution to EPF (employee provident fund) and a union policy that enables mushrooming of more screens will help. More theatres will generate more revenue, enabling more films to be made,” Rathi said, emphasising the need for liberalised policies.
Kamal Gianchandani, chief executive officer, PVR Pictures Ltd, admitted that the film entertainment industry does feel the government, both central and states, could have done more for it considering it has always been the first to shut down and the last to reopen. An extension on the Emergency Credit Line Guarantee Scheme (ECLGS) that was initiated by the finance ministry to provide loans to medium and small enterprises, could help get the capital cycle going and provide support in terms of liquidity for properties that have been committed to by multiplex chains, especially since banks remain wary of extending help for the same. “While we understand India is a market with different needs and our resources are stretched, the exhibition sector could take several months and perhaps years to recover (from the covid crisis),” Gianchandani said.
Multiplexes operate on a capex-driven and labour-intensive model, and therefore a prolonged zero-revenue phase due to lockdown has created threatening impact on the business, agreed Kailash Gupta, chief financial officer, INOX Leisure Ltd. “Additionally, entertainment is a discretionary spend, and therefore the recovery is always going to be a slow process, unlike the aviation or the hospitality industry,” said Gupta. “Therefore, we would request the government to come up with an all-encompassing and comprehensive package that would also lend strength and sustainability to the entire film industry, which is closely intervened with a lot of other businesses,” he said adding that a GST holiday for anywhere between two to three years would further allow for attractive ticket rates to patrons.
Producers have incurred significant losses on films that have seen delayed releases or have not been able to release as theatres are either working on restricted timings or are shut. The commercial potential of such films also dwindles over time. These locked funds impact the whole financial cycle for not only these producers, many of whom have already spent considerable money on publicity and will have to do so again, but also the whole ecosystem thereby affecting the ability to fund under-production or future projects. Increased costs of shooting in order to adhere to safety protocols, changing locations on account of restrictions, recasting or restaffing when a team member tests positive and providing for covid insurance, only make matters worse, according to Ahuja.
“At the very least, the Indian production community could be supported with loan moratoriums, easy access to working capital funds at subsidized rates and tax reductions- if not waivers,” he said. Live Mint