India Insight

Bollywood seeks tax breaks from Budget 2014

By Shashank Chouhan and Sankalp Phartiyal

Bollywood is hoping that the newly elected government’s first budget will contain tax breaks that will let it write a happy ending, at least for this year and next.

The Indian movie business, led by the Mumbai-based Hindi film industry, hopes Finance Minister Arun Jaitley’s budget will reduce the tax burden on movie studios as well as theatre owners and operators, and will provide incentives that would let them open more theatres around the country to boost ticket sales.

While the entertainment tax on movie tickets varies from one state to another, filmmakers pay numerous other fees, such as a 12.36 percent service tax to the central government that is charged on payments to actors and film crews, as well as customs on any imports such as movie equipment. This, industry insiders say, makes it tough to make more money. In Maharashtra, Bollywood’s home state, the taxes on a movie can comprise up to 61 percent of a film’s budget.

“You need to treat us fairly, not penalise us because you feel we are just entertainers. We want to be treated at par with any other service industry,” said Kulmeet Makkar, CEO of the Film & TV Producers Guild of India Ltd.

Makkar said he hopes the government will roll out a Goods and Services Tax that would replace all major indirect taxes and simplify the tax structure.

Railway Budget 2014: Reactions from the common man

In his maiden budget, Railways Minister Sadananda Gowda said the bulk of India’s future railway projects will be financed through public-private partnerships and that his ministry would seek cabinet approval for allowing foreign direct investment in the state-owned network. (Click here for Rail Budget highlights)

India Insight spoke to people at the New Delhi railway station for their thoughts on the railway budget:

GOPINATH AGARWAL, 72, from Kanpur

“The idea of bullet trains is a nice thing. I have seen a lot of governments over the years, and I think Narendra Modi’s government will be the best, but we need to be patient with him. I think Modi will be able to introduce bullet trains during his tenure. And it is good that they want to increase infrastructure at railway stations.”

Budget 2014: Wishlist from healthcare sector

Prime Minister Narendra Modi’s government has its work cut out if it wants to transform the country’s health system and provide a universal health insurance programme.

India has just 0.7 doctors per 1,000 people, and 80 percent of this workforce is in urban areas serving 30 percent of the population, according to industry lobby group NATHEALTH.

Less than 25 percent of the population has access to any form of health insurance. And India’s public and private expenditure on health is around 4 percent of its GDP, the lowest among BRICS countries.

Chidambaram’s ‘Hangout’ debut: learning from Modi, a lesson for others

(Any opinions expressed here are those of the author, and not necessarily of Thomson Reuters)

P. Chidambaram’s budget announcements might not have pleased everyone, but the finance minister has done reasonable work in the recent months to improve market sentiment and shed the ruling coalition’s “business as usual” image.

On Monday, he became the first cabinet minister in India to appear on Google Hangout, taking questions from young students, analysts and industry experts on topics from the budget, rising prices and the economy in general.

Bold moves, smart timing on rail fares, diesel proposal

(Any opinions expressed here are those of the author, and not necessarily of Thomson Reuters)

The railway budget in India is usually presented in parliament a few days before the main budget in February. In a rare move, the railways minister on Wednesday announced an across-the-board increase in passenger fares starting Jan. 21, the first such step in nine years.

The increase is significant. A ticket for an air-conditioned coach with three-tier sleeping berths in a mail or express train from New Delhi to Mumbai will cost 1,205 rupees, up 13 percent from 1,065 rupees.

Budget in a bunker

The leather briefcase that the finance minister holds up for the cameras before he delivers the budget in parliament is one of the most curious hangovers from British colonial times.

But one tradition that gets little attention is the intense secrecy that surrounds the preparation of the budget.

Weeks before the finance bill is presented, finance ministry officials clam up, and refuse to speak in detail about the economy to the media. The basement of the Finance Ministry in the North Block of India’s central government secretariat, which has its own press to print the entire set of budget papers, is declared off limits to people not involved in the exercise a month before the big day.

The bitter truth behind BJP’s deafening budget silence

To some, the parliamentary walkout by India’s opposition prior to the vote on the country’s annual budget motion marked the failure of India’s ruling Congress party to engage with its primary adversary, the Bharatiya Janata Party (BJP), over its claims that the Prime Minister had lied to parliament to protect his own reputation.

To others, the sight of BJP leader Sushma Swaraj leading her MPs out of the chamber as Finance Minister Pranab Mukherjee prepared to deliver the most important parliamentary bill of the year encapsulated the sorry state of India’s increasingly bitter partisan politics that show no signs of repair since trumpeting corruption became the opposition’s raison d’etre.
Lawmakers and leaders of India's main opposition alliance led by the Hindu-nationalist Bharatiya Janata Party (BJP) including Sushma Swaraj (front, L) and L.K. Advani (front, R) attend a protest against rising prices wearing aprons with protest slogans inside the premises of the Parliament House in New Delhi REUTERS/Stringer(INDIA)
Swaraj would later tell The Hindu that her walkout was to avoid disrupting the passage of the bill, but the damning point rang out loud and clear: the opposition had decided the corruption drumbeat was more important than the budget.

Mukherjee had earlier pleaded with senior BJP leaders to allow the budget to be debated prior to any discussion on a parliamentary privilege motion submitted against Prime Minister Manmohan Singh by Swaraj, promising a two-and-a-half hour debate on the issue after the budget had passed.

Congress looks to seize the initiative as budget looms

It has been a winter to forget for India’s ruling Congress party, as a series of corruption scandals have muted its ability to control parliament, dented its popularity ratings and dappled the formerly dazzling-white kurta of Prime Minister Manmohan Singh.

India's Prime Minister Manmohan Singh speaks during the 11th Delhi Sustainable Development Summit 2011 organised by The Energy and Resources Institute (TERI) in New Delhi February 3, 2011.  REUTERS/B Mathur

But rumours of a deal with the emboldened opposition to launch a parliamentary probe into corruption allegations that would end months of paralysis, and a surprise attack on the Bharatiya Janata Party (BJP) leadership by one of their former ministers could signal a ceasefire in the war of words and a light at the end of the tunnel for Congress.

TV channels, citing party sources, reported a compromise deal between the warring parties on Tuesday, as Singh announced he would be conducting a broadcasted press conference with the editors of India’s leading news channels on Wednesday, in a move to clear the air over graft allegations and restore confidence in his leadership days before parliament opens on Feb. 21.

Shunning UK aid would show India’s rising confidence

Choosing to jump on its own terms than face the ignominy of waiting to be pushed, India may have politely but firmly asked the UK not to send any more aid from next year in a sign of the country’s increasing self-confidence on the global stage.

Britain's Prime Minister David Cameron (L) and Indian President Pratibha Patil attend their meeting at the presidential palace in New Delhi July 29, 2010. REUTERS/B Mathur

Citing whispers in London’s corridors of power that suggest the country’s Department for International Development (DFID) was preparing to radically reduce the cash sent to India, the Indian Express reported on Wednesday that Nirupama Rao, India’s Foreign Secretary, had asked the Finance Secretary “not to avail any further DFID assistance with effect from 1st April 2011.”

A DFID spokesperson told Reuters: “All DFID’s country programmes are currently under review to ensure our aid helps the poorest people in the poorest countries. No decision on future funding to India has been made and we are in close dialogue with the Government of India.” The Ministry for External Affairs were not available for comment.

Hyderabad airshow crash a wake-up call?

INDIA-CRASH/

It was a promise that Lt Cdr Rahul Nair could not keep. Some months ago, Nair had promised to return home soon to sample his mother’s cooking.

On Wednesday, Nair and fellow pilot Cdr S.K. Maurya lost their lives during the Indian Aviation 2010 air show in Hyderabad.

The pilots, having more than a thousand flying hours to their credit, were flying the Kiran MkII aircraft, which was inducted in the armed forces in the 1980s.

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