The stubborn stand of YSR Congress party president and Andhra Pradesh chief minister Y S Jagan Mohan Reddy towards Tollywood and his reluctance for increasing the ticket prices in theatres has been an enigma to the industry people for quite some time.
But there is a reason for Jagan’s lack of sympathy towards the Telugu film industry.
According to highly placed sources, he reportedly made enquiries with the officials as to what benefit the state government would get by granting favours to the film industry and what revenue the state would get from the industry.
Jagan was shocked to know that what the state government would get from the film industry in the form of entertainment tax was pittance. For the last few years, the tax revenue from the films to the state has been not more than Rs 15-20 crore.
“Even during the years of big-ticket films like Baahubali, which claimed to have grossed nearly Rs 1,000 crore, the tax revenue to the state was not more than Rs 20 crore, which is not even equal to the remuneration paid to a popular hero for a single film,” a source in the government said.
This is not the case with just Andhra Pradesh, but even in other states like Telangana and Karnataka.
The chief minister reportedly wondered how the tax revenue from the film industry could be so low, even though the film makers make tall claims in the media about the box office collections.
The officials reportedly told Jagan that the distributors and exhibitors, especially in “B” and “C” centres, downplay the theatre collectors to avoid payment of entertainment tax to the government.
“In major cities where the films are released in multiplexes, there is some transparency in ticket sales because of online bookings, but in districts and mandals, there is no accountability. Even if the film runs to full houses, the sales projections are underplayed and hence, the tax revenues are vey low,” the officials said.
The chief minister reportedly felt that it is nothing but cheating by the film industry people.
“They seek various favours from the government like lands at cheap rates for studios and other tax concessions. Film actors take remuneration in crores of rupees and the film makers get huge revenues from distributors. Why should we have sympathy towards film industry when the government is getting peanuts from them in the form of tax?” he reportedly asked.
Sources said Jagan is working on a strategy to take control over the ticketing in all the theatres so that it would get its due tax share without any scope for manipulations in theatre collections.
