NEW DELHI — India could be on the brink of a multiplex boom after finance minister Yashwant Sinha halved taxes on plexes in towns and rural areas Thursday.
The tax cut opens the way for companies including Priya Village Roadshow, E-City, CityPulse Media, Videocon, Shringar Films and Inox Leisure to take advantage of India’s huge population who don’t have access to screens. There is only one screen per 70,000 people in the country, compared to one per 10,000 in the U.S.
Priya Village Roadshow (PVR), which has three multiplexes in Delhi, will set up eight more on the city’s outskirts and has finalized plans for another 10-screen multiplex. Lanco has partnered with PVR to launch another two theaters. Inox will open several four-screeners by December and the beginning of next year. E-City, a subsidiary of the Essel Group, will open its first six-screener this July and plans to add 57 screens and 17,913 seats over the next five years.
“The video boom has died down, and people are flocking back to the theaters,” said Manmohan Shetty, chairman of Adlabs Films, a company that has opened a four-plex and an Imax theater in Bombay. “With the right incentives, people have started thinking that they want to get into the business of exhibition.”
The Indian government estimates that around $160 million will be pumped into the multiplex business in the next three years in Maharashtra, the state that houses Bollywood, and $50 million in Gujarat.
In related news, the government also cut taxes in the broadcasting sector in its budget on Thursday. Customs and import duties on studio equipment and production facilities, have been reduced from 35% to 25%. The corporate tax on international broadcasters has been cut from 48% to 40%.
The Information & Broadcasting Ministry’s budget has been upped by 22% to $100 million.