NEW DELHI: The Indian entertainment industry is at the threshold of emerging as a big market internationally with an expected growth rate of 20 per cent, fuelled by growing global interest in Indian products, estimates the Confederation of Indian Industry (CII).

However, the apex chamber also adds that restrictive regulatory framework and multiplicity of service taxes are affecting the industry’s growth.

A comprehensive paper on the Indian Entertainment Industry prepared by CII says that Indian TV content producers have already made inroads into Asia-Pacific markets. There is a growing interest in broadcasters and distributors in the US and UK to look at India specific content. The paper states that the Industry had a turnover of Rs 166 billion in 2002 and grew to Rs 190 billion in 2003. 2002-03 showed a 15 per cent growth rate, while the industry was expected to grow at 20 per cent until 2007.

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The CII paper points out that revenues from TV contribute 70 per cent to the total entertainment revenue pie and this is expected to grow at a compound annual growth rate of 17 per cent over the next five years. The Paper also says that the live entertainment segment had grown by 60 per cent over 2002 and is expected to sustain the growth, if provided the right infrastructure and regulatory framework.

The CII paper further finds that the overseas market had its best year in 2003 in the last five years with five films crossing the $2 million mark in gross collections from the US and UK. This could be sustained and increased with co-production treaties, regulatory framework and international representation, the paper adds.

The CII paper says that certain key issues are hampering the growth of the media and entertainment sectors. Inadequate infrastructure, lack of international CO-production treaties, lack of representation of Indian companies at international events are issues, which need immediate attention.

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Other issues like restrictive regulatory framework, unfavourable licensing fee structure for private FM radio, lack of professional training institutes, multiplicity of service taxes are also affecting the industry, the CII paper adds.

The CII paper also states that there is a vast untapped pool of talent in the entertainment sector, which is deprived of formal training normally available to aspirants in other sectors including IT. The Paper suggests that it is imperative that this vast pool of talent be provided with the requisite training so as to equip them with skills to enable the Indian entertainment industry to bring itself at par with global standards. Hence, while IT sector had been encouraged substantially, there is a need for incentivising private investments in media and educational institutions, the CII paper adds.

Education is the most important part of a country’s infrastructure, and India has tremendous scale potential (especially in relation to non-white collar education) in this sector. According to the CII paper, while there is tremendous potential skill sets in this sector, it sadly lacks in the system
set which had resulted in the sector failing to capture its true value on a global basis.

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The CII paper states that India has the potential to position itself in the global media and entertainment marketplace and, with this objective suggests that Government should grant concessions to the privately funded and notified media and entertainment institutions.

The paper suggests that notified private sector media and entertainment schools should be granted the status of infrastructure facility under section 80 (IA) of the Income Tax Act. It further recommends extension of a duty free import regime for import of equipment by the notified media and entertainment institutions.

The Paper also recommends tax exemption be extended up to three years for international faculty facilitation and Bank loans for students to be covered under priority sector lending.

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