The report says that black money is used often during the start of a movie’s production with unaccounted funds in the guise of loans under dubious heads.

Is Bollywood an instrument to turn black money into white
news Bollywood funding Tuesday, December 08, 2015 - 11:50

The Income Tax department in a recent report said that a significant portion of Bollywood funds come via hawala and hot-money routes, which not only evades tax, but also poses a threat to general law and order.

The report says that black money is used often during the start of a movie’s production with unaccounted funds in the guise of loans under dubious heads.

Jagdish, an experienced production assistant told The Hindu, “The core issue is really of financing: unless a ‘star’ signs the film, banks stay away from funding. Funding in an ad hoc manner, from property dealers and other business sources, leaves clear room for grey transactions carried out of books.”

Jagdish added, “The black-to-white ratio in medium-budget films not financed by banks but by multiple, small financier ranges is 60:40, even much higher in some cases.”

The article also mentions how “Utthaan” produced by Kumar Sanu was allegedly financed using only cash.

“At the end of each day, a vehicle filled with bags of cash would be delivered to not only workers and technicians, but also senior artists,” the article quotes a production assistant who worked in the movie saying.

Some major production houses have registered their companies overseas, which are seen suspiciously by the IT department. 

A recent media report said that many producers and distributors enjoy a close relationship with the underworld and strengthen their control on film business.

In 2011, Wikileaks in one of its released cables, said gangsters and politicians invested their “ill-gotten” wealth in the filmmaking business and reap the profits in ’white’ money.

A sting operation by news website Cobrapost in 2012 caught leading producers and directors like Vashu Bhagnani, Anees Bazmee and Anubhav Sinha allegedly admitting on camera how the industry is being used to convert “black” money into “white.”

                

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