The recommendations of this Committee were not implemented.
More than two decades later, in 1949, a Film Enquiry Committee was appointed by the Government of India for a second time to inquire into the conditions of the film industry. Mr. S. K. Patil was its Chairman and M/s. M. Satyanarayan, (Dr.) R.P. Tripathi, V. Shankar, V. Shantaram
and B.N. Sircar
were its other members. It published its report in October 1951 in which it made certain very important recommendations. It observed several serious maladjustments in the structure of the Indian film industry, and concluded “that evils in the industry having crept far too deep into system,” it would be unable to perform itself.
As such, it recommended some drastic measure for immediate implementation. The recommendations made by it can be broadly grouped into three categories:
A. Those meant to stabilise the industry and
B. Those meant to remove the industry’s existing disabilities.
They may be summarised thus:
A. Stabilisation of the Industry.
It has suggested a new organizational structure. According to this there will be a Film Council formed by the Government. It will have regulative and supervisory powers over the entire industry and serve as its guide, friend and philosopher. It will have separate panels to assist the Council in its various activities with functions such as technological and psychological research, licensing and inspection of studio, setting up of training institutions, a story bureau, casting bureau, educational film panel, short film panel, etc. The Council will serves as a liaison between the various Governments so as to co-ordinate their work and maintain and promote uniformity in legislation and administration in film matters. It will be an 18-members body, representing Government, producers, distributors, exhibitors, artistes, technicians, labour, educationists, financial experts, etc.
The fund for running such a Council will mostly be found from a cess on imported raw film and exposed film and from a 10 per cent, contribution from entertainment tax returns.
Secondly, under this scheme there will be a Production Code Administration as in U.S.A, This will also be a Government elected body with regional offices at Bombay,
Calcutta, Madras and Delhi. The Government will be responsible for its constitution and administration at least for the first 5 or 10 years. The work of the P.C.A. will be to examine scripts so as to ensure that the films produced conform to standards of decency, good taste and public education. It will serve as an adjunct to the Film Council. It will guide producers during production of a picture and scrutinise publicity materials. An important function of the P.C.A. will be to examine films meant for export. The F.F.C. recommended that even if there was a delay in the creation of a Film Council, the P.C.A. should be formed forthwith under a Central Ministry.
Thirdly, the Committee recommended that the Government should form a Film Finance Corporation. If the industry was to be rehabilitated, the F.F.C saw no escape but to establish an institution to finance film productions. It suggested that the F.F.C. should be floated with an initial capital of Rs.1 core to be subscribed by the States, the industry, and the public with all the three having sufficient stakes in its operations. The corporation would advance funds to producers for individual production whose plans would be approved by the P.C.A. The applicant producer would be required to provide at least 25 percent of the finance for the production before he approached the F.F.C. and to undertake to produce the film before a specified period. The F.F.C. would be closely associated with work and progress of the financed production. The contracts with distributors will have to be made known to it. Their terms with distributors should ensure that the corporation’s advances are repaid immediately and that the producer’s investment remains the first charge on the net revenue.
Fourthly, the Government should set up an Export Corporation to supervise and stimulate export of films overseas.
Fifthly, the committee recommended the formation of an “Institute of Film Technique” and a “Central Institute of Film Art” to be formed under the supervision of the Film Council.
B. Measures to remove Disabilities.
1. Entertainment tax should be an ad valorem levy of 20 percent on gross collection of cinemas (i.e. 25 per cent of net taking) without reference to the classes of admission and without any exemption for any class. Out of this, 10 percent should be given to the funds of the Film Council and 5 per cent to the Finance Corporation for one or two years towards its capital.
2. The fees charged from producers for censorship of films should be nominal. The cost of maintaining and administering the censorship machinery should be met from other revenues derived from the industry.
3. No octroi should be charged on films when sent to a station for screening as they are only articles in transit, the utility of the film not being totally exhausted at any time of the interim stages. Films should therefore be exempt from Octroi.
4. No charges should be levied for posting policemen at the cinemas as their duties to maintain order, unless the police are requisitioned specially by the exhibitor.
5. Licence fees charged for storage of film or operation of cinemas should be to cover only the actual overhead charges and should not be made source of revenue.
6. An essential principle of taxation is that no one should be taxed in respect of the same item or function: the levy of show tax or theatres tax constitutes such double taxation. This inequity should therefore be removed if necessary by legislation, and show tax or theatre tax should be entirely abolished.
7. As regards income tax there are several inequities which should be reduced as for as possible, the current system of amortization followed in assessing producers and distributors should be replaced by a more rational method of assessment.
The expenditure on periodical renovation of cinemas and fitting should be treated, to a reasonable extent, as a legitimate first charge on the revenues earned by the theatre; the rate of depreciation and obsolescence in case of both the technical equipment and the theatre furniture should be fixed in accordance with the actual experience taking into account the severe conditions of usage. In the case of artistes, their earnings should be treated as professional income and deductions should be allowed on account of expenditure for professional reasons.
8. A duty of 4 annas per foot in levied on exposed India films which are reimported into India unless they are reimported within 3 years; such reimports of Indian films should be allowed free of duty irrespective of whether they are returned within 3 years or not.
9. The number of cinemas in the country should be increased substantially particularly in places which are not adequately served by cinemas, A very essential need is for the development of touring cinemas to visit rural areas; full encouragement should be given for their development, of course, without adversely affecting the permanently located cinemas.
10. Indian film industry should be protected against unfair competition from dubbed versions of foreign films; such films should not be allowed to circulate it the country unless in each case the P.C.A. is convinced that the film possesses special merit as a classic or an educational or historical film or with artistic value.
11. As regards “A” and “U” certificates, the British practice of permitting children to see “A” films provided they are accompanied by parents or guardians may be followed in India.
12. In the enforcement of rules regarding the prohibition of children to screening of “A” certified films, the primary responsibility should rest with the State authorities and not with the exhibitor,
1. Steps should be taken to produce raw film and cine and studio equipment in the country and Government should help in getting started manufacturing units for the purpose.
2. Institutions should be started for training technicians and artistes. The Committee felt that the specialized needs of the film industry could not be met by general course provided in universities or Colleges and therefore there was need for specialised Institutions where such students could be given practical training.
3. A scheme of Awards might be instituted by the Government to encourage the production of films with high aesthetic and technical standard. The Government should also encourage the production of children’s films and the Films Division might undertake production of such films.
4. All censor certificates granted to film should be valid only for 5 years and the films concerned should be got re-certified if they are to be screened thereafter.
[Reproduced from an unidentified film industry publication from the year 1955/56]