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Friday, 15 March, 2002, 18:07 GMT
India's entertainment industry blockbuster
Indian cinema
Indian films make blockbuster profits
Revenues in India's entertainment industry rose 30% in 2001, seven times faster than the economy as a whole, and are expected to double over the next five years.

Income from the film, television, music, radio and live entertainment totalled 130bn rupees ($2.7bn), figures released at India's Frames 2002 industry conference showed.

Economic growth in India was cited as the major reason as increasing urbanisation, literacy and per capita income and the spread of digitalisation accelerated demand.

"Digitalisation will lead to a vast improvement in content quality and ease of handling content, which will see consumers buying more content," the report by accountants Arthur Andersen and Federation of Indian Chambers of Commerce and Industry (FICCI) said.

Blockbusters

Funding for the film industry, which produced over 1000 movies last year, also looks set to boom with new government measures to increase investment along with a growing international audience.

The budget included tax incentives for building multi-screen facilities and the Reserve Bank of India now permits commercial banks to finance Indian film makers.

The industry has long been funded by private financiers, who charge up to 50% interest per year on loans, because the Reserve Bank considered film making too unorganised and risky.

State-run Industrial Development Bank of India (IDBI) also plans to form a consortium with local banks to fund the film industry and has already lent 650m rupees to produce nine films at 16% interest.

"All these factors will cause the film segment to grow steadily at a compound annual rate of 15% to reach a segment size of 50bn rupees by 2006," Arthur Andersen estimated.

But the report warned piracy, high state entertainment taxes and financing would continue to be major problems.

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Shardul Shroff, partner, Amarchand Mangaldas
"Five film companies have listed on the stockmarket."
See also:

13 Feb 02 | Business
Bollywood's hopes for Oscar dollars
20 Aug 01 | Business
Indian corporates target Bollywood
04 Aug 01 | Europe
Swiss appeal for Tamil cinema
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