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Rs100 crore is a myth, says Sudhir Mishra on studios closing down

The Hazaron Khwaishein Aisi director urged government to abolish Entertainment Tax.

Keyur Seta

An unpleasant development has hit the Hindi film industry in recent weeks with some studios either closing down or going through a rough patch. Veteran filmmaker and producer Sudhir Mishra touched upon this topic and appealed for the abolishment of Entertainment Tax during his discussion at the ongoing Lonavala International Film Festival of India (LIFFI).

Speaking on the hardships faced by the producers, the Hazaron Khwaishein Aisi (2005) director said, “Even if you make a film in Rs2 crore, you will need to spend Rs7 crore in total. You need at least Rs4.5-5 crore to market. No film today costs less than Rs6-7 crore.”

Mishra feels the ‘myth’ of Rs100 crore is closing down some studios. “Why are these studios closing down today? Because you created a myth that your film earned Rs100 crore. You haven’t earned Rs100 crore. Out of that, Rs55 crore went to the exhibitor. You have earned only Rs45 crore. So, if the cost of your film is Rs90 crore, it’s a loss. This is the reason why these companies are closing down.” 

The filmmaker feels the taxes levied on the producers aren’t helping either. “Since the beginning of movies, the government has made money on every film because they collect Entertainment Tax. 90% of the producers have lost their shirts. This is a fact. My friend Manmohan Shetty said only 7% of producers make money. It’s a good thing to have good producers and they should be encouraged.”

He continued, “The government should remove Entertainment Tax. Why do you tax people who go to a theatre? This is a British kind of a tax. Taxes on all sorts of entertainment should be removed. If I make money, I should pay Income Tax. This industry is taxed to death. Most of the producers are dying. All creative people need not have a marketing sense. It’s not our job. I am a producer because I am forced to be one.” 

Mishra pointed out that some other countries give tax breaks to cinema, contrary to India. “In England if you invest in cinema and culture, you are given tax breaks. This is how they encourage culture.”