The veteran director was speaking at a panel discussion here at FICCI Frames, which was moderated by senior journalist Bhupendra Chaubey.
Citing examples of controversies over films such as "Udta Punjab" and "Padmaavat", Chaubey asked Benegal whether the situation today is similar to the dark period of 1975-77.
To this he replied, "We probably are going back to it in some ways. I think so. In 1975-77, my own films, one after the other, faced problems. One film was even banned. We are going in that kind of a thing. That's why I say we need a debate on a larger scale."
The National Award winning-filmmaker said the problem lies in the "public" consumption of art and that is the cause of concern for the government.
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"When you see something privately and when you see something publicly, the impact is different. Not enough work has been done to analyse and study this. This is something what I'm concerned about.
"Public viewing is what the government actually worries about. It is the reason for having the CBFC. You can see anything privately, which is why when television came, nobody worried about certification there," he said.
Bose, who last directed critically-acclaimed "Margarita with a Straw", said the government should refrain from moral policing.
"The solution is, there can't be a censor board, there only needs to be a certification board. The government takes action on the wrong things and its inaction is loud and clear on poverty, trafficking...
"We are not in a good place and we can't really trust the government to be the ones standing in and guarding our morality. We are mature enough as a country. No institution, whether government or non-government, can be given this power on creativity," she added.