What are your views on the new government at the centre?
Everything is looking promising for now, with the new government. Everybody appears to be positive about the fact that things are going to change. Expectations are building up that the new government would be very proactive in initiating policies and measures to get the economy back in action while also making sure that every industry gets an impetus. Without going into specifics, I think it's early days to judge whatever steps have been taken so far. If most of the things they mentioned get implemented on time, it will obviously be very good for the industry. Lets hope for the best.
Past five years under UPA-2 have been quite challenging for across the sectors. Are you excited about the changes in overall business environment that are likely under the new leadership?
It will be inappropriate for me to talk about difficulties faced by other businesses. However, in the space I am operating, certainly not much has happened. The kind of improvements we were looking at were missing. For instance, tax rationalisation didn't take place in a uniform manner. And taxes being a state subject for our industry, certain states did witness sporadic tax breaks that helped our business grow, there were a few geographies where we couldn't. We tried our best to make the most of whatever economic environment existed and make a business profitable. But now we want to take the business to next level of growth and will require a lot of support from the government to be able to do that.
The last few days saw some significant moves by the new government. You think right kind of noises are being made?
Like I said, it's early days. But whatever one can evaluate from the announcements being made, they seem to be in the right direction. Arun Jaitley talking straight-away about economic growth after being appointed as the finance minister is a huge positive. Talks of trying to curtail inflation, GST and FDI, etc, has seen markets responding favourably. The positive sentiment is also visible in the way Indian rupee has strengthened from the earlier levels. So, overall it appears to be a good start. If the country does well, we all end up doing well. Having said that I also feel that it's too much to expect all of a sudden.
In your opinion, what should be the key priority areas for new government?
While infrastructure, power, education etc are a given, I think making overall taxes less complicated, opening certain sectors that are controlled by the government, removing bottlenecks for conducting business are a few other areas that needs to be in the top priority list.
Among challenges faced in your industry, entertainment tax has been a big issue...
Yes, and it would be great if rationalisation of tax happens and entertainment tax gets replaced by goods and services tax (GST), which should also not be very high. For instance, if GST is in the region of 15-20% that would be a big boost for us because in certain states the tax is as high as 45% and 60%. Then of course, one leg of our business is dependent on real estate. If positive developments happen in the realty space it will help us expand big time. Developers will get more land parcels to pursue mixed-use developments and we will get more sites to house our multiplexes across the country. Currently, the growth rate of multiplexes is very slow as only 200-odd screens open up every year.
The film producers' fraternity has been been seeking government support as well...
Film content is the key ingredient and if challenges / bottlenecks of film producers and production houses get addressed it will help in creation of good quality, compelling content which is very crucial for film exhibition business. Good supply of quality content coupled with boosting up the real estate sector will mean significant growth.
What kind of growth can be envisaged in the film exhibition industry?
We have been consistently adding 70-90 screens annually and the number has been a little over 200 screens for the overall industry. If business environment gets more conducive and issues outlined earlier are sorted out, I think we can very easily see over 300 screens getting added just by PVR every year. But that can happen only if more opportunities open up. Growth will happen if the environment becomes investment friendly.
There are mixed views on the new government's approach to dealing with foreign direct investment (FDI) in the country. What is your take?
If FDI in retail opens up, I think, it will encourage real estate developers to build malls. This is because if there are brands in the market only then will building more malls become a viable proposition for the real estate developers. More brands will mean more malls to accommodate them and more opportunities for the multiplex operators to grow and expand business.