Nfdc May Pump In Funds Into Film Industry

The National Film Development Corporation (NFDC) may be en route to becoming one of the government vehicles to finance the film industry which recently acquired industry status.

Though no final decision has been taken, experts point out that NFDC is in a position to undertake this job as it has already dabbled in film financing earlier.

"The government is weighing the option of pumping in finance required by the film industry through the NFDC. However, it is still in an exploratory stage," says T Krishna Murty, executive director, finance, NFDC.

"We can finance a film in two ways. We can either give 20 per cent of the total project cost against distribution rights, which can be sold at the beginning, and recover the cost. The other option is to rope in banks and form a consortium to finance 60 per cent of the cost." said Krishna Murty.

 

"The total requirement of the industry is estimated at around Rs 1,000 crore. The government may pump in an initial amount of Rs 400-500 crore," he added.

NFDC is involved in two kinds of activities - commercial and developmental.

It earns its revenue from marketing airtime on countdown shows and primetime cinema for Doordarshan. The proceeds are shared between the two.

The developmental activity includes equipment financing, theatre financing, and film financing. It lends support to small-budget films and documentaries.

However, it has had to work within a ceiling of Rs 25 lakh per producer for the above.

Krishna Murty underlined the reasons as to why the centre would prefer NFDC over the banks. "We have the expertise for appraising proposals as we are already into film financing. We are also under the ministry of information and broadcasting. The I&B ministry will have to get the approval from the ministry of finance(MoF) in case it wants to pump in money through banks. However, it can bypass the process if it goes through the NFDC,".

NFDC will soon have a board of fifteen directors, of which twelve will be from the film industry. "The advantage of having representatives from the industry is that they know the taste of the people." The rationale is that inputs from these representatives will henceforth result in NFDC-financed films being made commercially viable.

Krishnamurti expects the board to be in place within the next week. Interviews will also be conducted from August 21 for the post of managing director at NFDC, which has been lying vacant since Ravi Gupta's term expired on May 2 this year.

Since then, Krishna Murty himself and Raghu Menon, joint secretary, ministry of information and broadcasting, have alternatively taken additional charge of NFDC over and above their existing functions.