High rates of entertainment tax and lack of uniformity in levy structures across states are inhibiting growth of film industry in India but it could be addressed through adoption of GST.
"Adoption of the goods and services tax (GST), subsuming service tax and entertainment tax, could promote growth of the film industry," according to the Economic Survey 2011-12.
Commenting on hurdles before the film industry that produces about over 1,000 films a year, it said, "High rates of entertainment tax and lack of uniformity in tax structure across states are major factors inhibiting growth of the film industry."
Also with piracy becoming a major issue, the survey said the Ministry of Information and Broadcasting is in the process of amending the Cinematograph Act 1952 to make it relevant to present day requirements.
Suggesting sops to promote the industry, it said: "Given the potential of this sunrise sector in India's growth and trade in services, efforts are needed to relocate the business of the Indian film Industry from foreign countries to India by addressing issues like tax credit."
During 2011-12, the I&B Ministry has accorded 20 foreign production houses shooting permission, it added.
Commenting on the potential of the FM radio segment, the survey said the third phase of FM expansion "would usher in a new era of infotainment for people besides introducing new vistas of opportunities for employment."
In the third phase, the government has taken a decision to e-auction 839 FM channels spread over 245 cities across the country. At present 86 cities of India are covered under private FM stations.
The TV segment, that has more than 700 channels and 100 million pay-TV households, is expected to get a major fillip by way of the Cable Television Networks (Regulation) Amendment Act 2011.
"Four metros will go digital in cable television by 30 June 2012, with the rest of the country following suit by 31 December 2014. The digitalisation will redefine broadcasting and bring benefits to all stakeholders," it said.
Providing details on Prasar Bharati, the survey said the provisional expenditure of the public broadcaster in 2010-11 was Rs 2,686 crore and the total revenue earned was Rs 1,310.3 crore.
"Prasar Bharati has taken a number of steps to increase revenue generation by adopting an aggressive marketing strategy. The Budget for 2011-12 provided Rs 1,944.1 crore to cover the resource gap of Prasar Bharati," it added.