Demonetisation: Can Bollywood survive without black money?
Most Bollywood celebrities have hailed Prime Minister Narendra Modi’s move to demonetise Rs 1000 and Rs 500 notes for its direct hit attack on black money.
Following Modi’s decision, celebrities such as Amitabh Bachchan, Rajinikanth, Karan Johar and Anurag Kashyap have praised it but there’s another lot in Bollywood which has every bit to lose – the financiers.
The box office has been hit by the demonetisation, directly by the lack of liquidity in the country for people to watch films with, indirectly by the lack of people who have been in queues, instead of watching films. Trade estimates put the damage to be almost 50 per cent on receipts since November 8, industry experts say the overall business is down to nearly 8-10%.
But Bollywood without black money is a shock for many. Looking at the loss, some Bollywood producers and actors have come out criticising the demonetisation and claiming it will yield no result. While it is evident that the entertainment industry’s profits got hit due to documentation, it would be more important to see whether the demonetisation will be able to curb the use of black money which is so rampant in Bollywood.
In 2012, Bollywood biggies Vashu Bhagnani, Anees Bazmee and Anubhav Sinha were caught on camera admitting the fact that money laundering is rampant in the film industry. All the three filmmakers were seen talking to undercover reporters posing as investors.
Experts say that in Bollywood, black money is used to cover unaccounted production costs, sometimes even fees of actors is also managed. Bollywood has always been a haven to exploit investments in the film industry to convert black into white.
Despite Income Tax departments’ close watch on Bollywood, the industry manages to avoid taxes with dodgy dealings through hawala and hot-money routes. Income Tax department reports have found that significant funding in Bollywood comes from hawala and hot-money routes.
In 2011, Wikileaks had exposed film industry’s underworld connections, and that “it welcomed funds from gangsters and politicians looking for ways to launder their ill-gotten gains, known in India as ‘black money’”. Experts claim that the black-to-white ratio in medium-budget films not financed by banks is 60:40, even much higher in some cases.
On a filmi note, Kaizad Gustad’s first film Bombay Boys had Naseeruddin Shah playing a Mumbai don who produces films as well. The film did away with the vast network that powers Bollywood and prefers to deal in cash, unfortunately, most of which is in black.