Bolly News: Bollywood buckling in tough economic climes

BOLLYWOOD'S trademark glitz and glamour have been hit by a chill as the global economic downturn takes its toll on the Indian film industry.

Project cancellations, mass lay-offs and delayed releases are haunting the world's biggest cinema factory, which normally produces about 200 films a year.

Until recently, some Indian megastars were being paid up to $18 million per film. But big-budget projects with expensive names are the hardest hit in the slump. Iconic actors like Shah Rukh Khan, Katrina Kaif, Akshay Kumar and Salman Khan are facing massive pay cuts.

"I have heard of pay cuts of 50% and more for artists," says Vijay Khemka, president of the Film Federation of India.

Komal Nahata, the publisher of trade journal Film Information, says Mumbai's big production companies are frantically renegotiating salaries, sacking staff and delaying production schedules. "The mood is one of fear and people are worried about where this slump will leave them."

Big corporations have made substantial investments in the film industry in the past few years and this has helped drive up project budgets and pay cheques. But as the Indian sharemarket has lost about half its value amid the global financial meltdown, funding for many film projects has evaporated.

"Money had been flowing into the industry like a river, but suddenly the corporates have become tight and the money has dried up," says Indian film trade analyst Amod Mehra. "The bubble has burst."

Mr Mehra estimates hundreds of films have been shelved. "Not a single project with a star cast has started production or been announced in the past three months," he says. "The prices for the actors and technicians will have to come down a lot further or else this industry will go to the dogs."

T-Series, one of India's biggest production companies, has instructed high-profile director Pooja Bhatt to slash the budget of Kajra Re, a film currently in production. It is also renegotiating the $15 million pay cheque for superstar Salman Khan to appear in an upcoming yet-to-be-named movie.

Already this year several big-budget films have bombed at the box office, costing investors tens of millions.

About 800 films are released across India every year, with an annual worldwide audience estimated at 3.5 billion people.