Theatre owners’ woes increase as states refuse to extend benefits

Delayed re-opening permits from state governments, absence of fresh content and mounting losses over the past year-and-a-half have spelt doom for the film exhibition business in India. And now cinema chains are looking at fresh challenges as states such as Uttar Pradesh, Maharashtra, West Bengal, Tamil Nadu, Karnataka, among others, are refusing to extend sops like property tax rebate, easy renewal of licences and entertainment tax holiday that are granted to new properties for a period of three to five years.

Theatre owners argue that of the five years, operations have remained suspended for the last 18 months due to the pandemic-induced lockdowns but they have been paying Rs50,000- ₹1 lakh per month on maintenance expenses including fixed electricity charges, staff salaries, and property tax.

Pravin Chalikwar, director at Priti Cinemas in Parbani, Maharashtra, who hasn’t been able to operate his single screen theatre since March 2020 said owners like him have been requesting the government to allow them to pay one-third of electricity bills due until now and the rest in instalments but haven’t heard back. “We hear more films are going directly to streaming platforms. And there is no point in reopening for one film, we need at least an eight-week line-up for it to make sense to resume operations (even after permits come in),” said Chalikwar. He claimed he’s spending around Rs50,000 per month on his cinema that has brought him no revenue in the last year-and-a-half.

Multiplex chains like PVR Cinemas and Cinepolis declined to comment on the story while INOX Leisure Ltd did not respond to Mint’s queries.

Earlier this year, theatre owners had pinned their hopes on the Union Budget, seeking ease of doing business including single window licence to open more screens, access to finance for multi-utility facilities such as food courts, and power and electricity charges to come at industrial and not commercial rates. Kailash Gupta, chief financial officer, INOX Leisure Ltd had said speedier tax refunds, interest free loans to prevent defaults and a reimbursement of wages for contractual workers and subsidies on salaries paid to the employees for the period of lockdown should also be considered as a relief measure by the central and state governments.

“Given that business has been impacted so much, theatre owners have no option but to reach out to authorities for survival, they really don’t have anybody else to turn to,” Atul Mohan, editor of trade magazine Complete Cinema said. “It is of course, up to the government to see if they can really help,” he added.

Cinemas have received some kind of breather, Mohan pointed out, with many developers agreeing to 20% of former rent rates which can be paid once content churn begins and business resumes.

Film producer, trade and exhibition expert Girish Johar said any kind of relief would be beneficial to theatres that are dying a slow death. “Several single screens, around 1,300-1,500 have already shut shop permanently. As cinemas gradually reopen across the country, any sort of pre-emptive measure would give them a breather,” Johar said.

So far, the government hasn’t extended any sops to cinema owners. Individual states though, have taken some proactive steps in the interim; Gujarat, for instance, announced a complete waiver of property tax for cinema halls for the financial year 2021-22 and waived fixed electricity charges for the same period.

“We have never been priority for the government and this is not surprising. Perhaps they fear that relief to the entertainment sector would be like giving us priority when everyone is suffering,” said a theatre owner declining to be named. Live Mint