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Fizz fills film finance frame: government aid, insurance fade in to focus

The Maharashtra government will henceforth extend financial assistance in four instalments as encouragement to the Marathi film industry for the production of quality films.

The first instalment of Rs 400,000 will be given on the completion of one-third of the film, the second of Rs 400,000 on the completion of two-thirds with the completion of special effects, dubbing, recording playback singing, premixing and others.

Another Rs 400,000 as third instalment after clearance from censors and other formalities and Rs 300,000 as fourth and final instalment towards the film. Earlier, the assistance was given in three instalments.

In a related film finance related development, the entertainment industry has decided to gear up for the era of film insurance.

On Friday, top film-makers told a seminar, organised jointly by the Federation of Indian Chambers of Commerce and Industry and the Film Federation of India in Bombay, that with the expected entry of overseas insurance companies in India, the insurance sector will not remain a closed field. India's insurance corporations will have to open up to provide insurance cover to the film sector.

Film-makers felt that after being given the industry status to this sector and finance from banks, insurance companies will have to follow suit.

The General Insurance Corporation has not given a thought to this aspect and neither a film-in-making nor its end-product is insurable today, the FFI president, K C Jain said.

He pointed out that this will not remain a closed field and along with foreign insurance companies, our own insurance companies will also enter the field of film insurance.

Industry experts deliberated on the issue in detail with the insurance company officials to arrive at a consensus so that the risk factor in the sector could be covered.

Jain said that the film-business is as risky as any other business and there was no harm in extending credit and insurance facilities to films.

An expert form Denton Hall of the UK, Ken Dearsley informed the gathering about the various financing and insurance schemes that are being followed in the western world. He elaborated in detail about the types of finances and the insurance schemes that are followed by film giants Walt Disney, News Corporation which owns the Twentieth Century Fox.

A detailed note on insurance for the film industry by Tata AIG Risk Management Services senior deputy general manager Uttara Vaid was also circulated to the members attending the conference.

It said, abroad film industry operates very much on the lines of a corporate structure, answerable to the shareholders and has been opting for insurance to combat losses ever since the era of silent movies, but in India, film insurance is still in its infancy.

The absence of corporatisation in films sector was strictly felt at the conference. To raise debt from capital markets, film producers need to be a limited liability company. Credit rating agency Crisil, for instance, does not rate debt of partnership firms or sole proprietors. As the film producers operate on sole or partnership basis, the capital market is not willing to invest in them.

Information and broadcasting secretary P G Mankad said it is time the industry corporatise its operation to avail of financial institutions' support. Even now, banks do offer loans against collaterals for hard property of film production houses, he disclosed.

Speakers stressed that the film firms would do well to follow internationally accepted accounting norms to avail of financial support and proper insurance benefits.

Eminent film-maker Subhash Ghai's Taal will be the first Indian feature film to get proper insurance. GIC's subsidiary United India Assurance is the company concerned. It has issued a list of things that will be covered and another list of things that won't be covered under the policy.

UNI

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