The Animators’ Budget – a Wish List

(The author is a former Civil Servant of 1984 vintage who voluntarily retired in 2005 to “put life into my graphics” as he calls it. Beginning with a small crash programme on multimedia and animation at the National Informatics Centre, Government of India, in 1995, he has completed a diploma in advanced multimedia, animation and video editing from Caba Innovatives in 2006, to go on to set up his own animation production studio, Voice & Motion Communications. Largely a self-taught animator, he is also the founder President of the Society for Animation in Delhi. He is currently a Consulting Editor with Animation Galaxy)

The Budget exercise has started for 2014-15, by the new Government with the promise of “Achhe Din Aayenge” – time for every one of us to start dreaming.  Pull out your notepads and start writing.  For the uninitiated, let me begin by saying that the Budget of the Government of India is an annual exercise that helps you plan the materialization of your dreams, provided those dreams are addressed – directly or indirectly.  And you achieve in direct proportion to what you dream.  Now is the time to dream up and convey to the Budget exercise, so that collectively those dreams are addressed.  The Budget exercise will culminate in the presentation of the Budget by the Finance Minister, followed by Demands for Grants in Parliament, for allotment of funds to Ministries and Departments, out of which money, these Ministries and Departments spend to service, support, subsidize and sop the industries and their various interest groups.  Sadly, there is no Ministry or Department of Animation and related arts.  Some ministries, however, do address the needs of the Animation sector – Ministry of Culture (in the form of various arts), Ministry of Information and Broadcasting (in the form of outlets and exposures to animation work – Films, TV, Newspapers, etc), and to some extent the Ministry of Information Technology (in its application to the IT content in our work).  The Animation sector, including Gaming, it is safe to conclude, reaches out to EVERY industry, segment of economy, service and sector.  Like the other arts, it transcends ALL barriers of caste, creed, sex, religion, place of birth, language, culture, and everything that the Constitution of India stands for.  In fact it “tickles the cockles” globally.

The animation sector has been promising unparalleled growth in millions and billions of US dollars for almost a decade now – a CAGR which ASSOCHAM, NASSCOM, CII and FICCI have placed between 28 and 41% during this period.  Today it is estimated at US $ 1.54 billion.  India’s share is at around 12%.  Youngsters rushed for training, training began to boom, outsourced stuff started pouring into the Indian Animation studios on the premise of “English-speaking-cheap-labor”, and studios sprung up overnight.  The promise is still there, yet we find training dwindling, studios bundling, and everyone else and his brother ‘swindling’ the artists.  At least that is what describes a large chunk of the Animation industry in India, if there is one – Entry by Passion, Exit by Depression.  Many of us witnessed the closure of training institutes or their branches and studios across the country, Crest, Rhythm & Hues, Picasso, Frameboxx, MAAC, DQ, Dreamworks and Disney included, not to mention the smaller non-descript ones.  Forty-five thousand trained animators flow out of training institutes annually, and only 5 to 7% are able to find meaningful jobs that will sustain them in the long-term.  The rest leave the industry.  I also firmly believe that UNLESS THERE IS PRODUCTION, THERE CANNOT BE INCOME, EMPLOYMENT or GROWTH.  The market estimates hold out a promise that must be tapped in order to unlock the potential for creating millions of jobs in this sector, loads of income to be generated, and reach out to the most promising rural interiors for those fabulous creations to reach the International market.

We have tried to play the blame game seriously, passing the buck to everyone “else” in the industry. Training blames Production and Studio services for poor intake and pay-pack, Production Studios blame training for poor quality, and high costs of procuring hardware, software and labor.  And both together blame the market for not catering to animation films. Very few, if at all, are able to visit international animation festivals and exhibitions to observe best international practices, fire their imaginations or even present papers on the Indian Animation industry.  But, seriously, we are ourselves to blame. There are too many gaps to bridge in the Industry.  Standards of animation education, training, incubation and internship are largely in a shambles. Employment is more on internship contract or freelance rather than what it really should be. Production is concentrated in small pockets and there is practically no real ‘exposure’ or distribution network for our own creative animations.  Research in production and market research are as good as non-existent.  The worst is that a very large number of us hate publicity for fear of being “raided”.  And this is where Government can, and must, play an extremely effective role through the financial instruments of the Annual Budget – Duties, Taxes, Subsidies and Grants – if animation is to create those millions of promised jobs, and help animation production add to the GDP, its growth and a rightful place in the ‘comity of arts’.

The most pressing needs for the animation Industry in India is the following 10-point wish list, as I see it with my experience over the last 18 years…

1.  Tax sops to encourage production 
To make some business sense out of it – tax sops are necessary.  Animation production and services use the costliest hardware and software and the most laborious tasks.  Production of one full length animated feature (like Spiderman) cost Dreamworks US $ 1.5 billion, and a like amount to market it worldwide.  Dreamworks then has to earn at least US $ 6 billion from that production in order to recover costs and be able to make another one and reach it to the market.  I suggest the following tax initiatives to enable production contribute meaningfully to the GDP…
Animation and Gaming must be immediately brought into the negative list for Service Tax.  This means that clients will NOT be charged service tax for any animation sold or serviced to them.  This will make animation and gaming services cheaper to that extent – by at least 12.3%.

a.  Duties on import of essential hardware, essential software, books and technologies must be on “holiday” for at least 10 years – a zero-duty regime for those graphic engines and cards, display units, production related books, essential software, etc.

b.  Income Tax holiday for an equal length of time, particularly sops on Corporate Income so that it can be ploughed back for stabilizing the animation production process.

2.  Grants for Research, Skill Development and Training
Let me be very clear, NO-ONE can BUY software, as you don’t own anything when you buy it.  And therefore, all money spent on software becomes NPA (non-productive asset) the moment a new version is out in the market (It happens almost every six months now).  It is estimated that theimport of just one software application in this field cost India more than US $ 512 million in 2012-13, and that too at a time when the Rupee was crashing.  Hardware required to be upgraded to the beyond i7 limits as creation and rendering times multiplied with newer and newer versions of software sold under the false premise of “lower costs of ownership”.   There is no “ownership” of software for the animator.  Grants of Rs. 25 lakhs per center should be made available through dedicated non-profit registered bodies in animation, to help a switch-over to the most basic open source software applications, research in their production methods, and setting up CENTERS OF EXCELLENCE for training of trainers, and incubation for industry-readiness – in the realm of the National Skill Development Council, involving universities and introducing STANDARD CURRICULUM in this vocation.

3.  Grants for Production Infrastructure 
“Rendering” is probably the single largest time-guzzler in animation production, particularly CG and VFX.  A dedicated venue for rendering (rendering farms), meeting, preview and specialized screening is absolutely essential, though totally missing.  Grants to the tune of at least Rs. 5 crores per zone for setting up 5 zonal dedicated facilities – render farms, auditoria for screening, “green-shoot” space, across the country (perhaps attached to centers of excellence) will be of immense help to get animation to stand on its own feet.  This infrastructure facility, controlled through PPP initiative with non-profit, registered and dedicated body of animators, will also help to raise revenues to recover the investments, at the same time innovatively create new jobs in the animation sector.

4.  Grants for International Participation 
International exhibitions and festivals of animation and related arts are a major source of real-world market-tapping, experiential learning, exchanging ideas, sharing and adopting best international practices.  A very large number of Indian animation experiences and talents go unrepresented at such forums for want of funds to meet the enormous expenditure.  A grant-in-aid of about Rs. 50 lakhs for this purpose is also a must for enabling Indian Animation to establish and increase its share in the International market, to help sustain jobs on-shore and bring in the dollars as returns on investments. 

5.  Grant for Animator Social Security 
Today, I am yet to come across any animator who has a pension fund or health cover to support him or her by way of Social Security. Endless unearthly hours of work, tight production schedules and deeply staggered, uncertain payments, leave the animator vulnerable in terms of his social existence.  The animator is extremely prone to the RISC disease, joint-jamming, and illness and accidents caused by loss of sleep.  A one-time grant should be provided, as seed money, for generating “equal contribution” mechanism to set up a pension fund and to provide health and/or hospitalization cover (under say the ESIC) for the animator.

6.  Grant for Writing and Producing Books, Publications and Training Materials 
The learning process never ends.  Sabbatical, post-experience and “refresher” learning is virtually non-existent in this industry, though it transcends all barriers.  Books constitute the Animators’ best friend where such higher learning is non-existent.  Training videos and films for high-end learning of animation skills, techniques and technologies will also be a huge step in this direction. A dedicated grant of Rs. 50 lakhs is required for writing original books on animation production, publishing journals and sharing industry-based original research in Indian Animation.

7.  Grants for Standards and Certification System 
The absence of any mechanism to set up and implement standards for training, production and costing is telling very heavily on the industry.  Certification of quality ratings on its various aspects cannot be done in the absence of standards.  A dedicated body of various stakeholders needs to be assigned this task through the Grant of at least Rs. 1 crore so that the work of quality assurance and implementation can begin in the field of animation and related arts in India.

8.  Grants for Holding Exhibitions and Festivals of the Animation Arts  
Traditional Indian Animation Arts like puppetry, clay modeling, paper-cut, and the new emerging ones like CG, Sand Animation, Light Animation and other creative media in animation are on the wane for want of exposure, market development and propagation.  An annual festival of these arts has just started taking shape in the country, though on a very small scale.  The lack of sponsors, donors and advertisers for such arts has further worsened such abilities.  There should be a dedicated grant of Rs. 1 crore to organize this kind of an event annually at a central, well-attended and easily accessible venue, which will recognize and reward exceptional talent in the field, provide a common venue for domestic and international marketing, and give a rare opportunity for exposure to Indian Animation talent within the country. 

9.  Subsidies for Production set-up 
Outsourced production requirements are not ALWAYS going to be available and sustainable. Therefore, unless there is home production, there cannot be sustainable incomes or jobs.  But because hardware and studio equipment for animation production is extremely costly, and production times a behemoth, an animator usually shies away from serious production, having to rely on old, fully-depreciated equipment for years and years, least of all able to raise a fund for replacement.  Alongside the tax holiday I have suggested above, Government, through a 10% Budget subsidy on dedicated animation production equipment, can assist the animators to produce animation, generate income, and create new jobs in large numbers, even in rural areas, through a huge dedicated dynamic production pipeline spreading across the deep rural interiors.

10.  Subsidies for Buying Books and Training Materials 
Buying high-end books to create a library for animation and related arts is a very necessary step to boost quality animation production.  But such publications are very costly in the international market, and no animator is able to buy such materials on his or her own.  There is no dedicated library of such materials also.  While the proposed Centers of Excellence can handle the setting up of infrastructure for libraries, purchase of books, magazines, journals and training materials dedicated to animation production will have to be subsidized to buy in bulk.  To begin with, a 10% subsidy on such procurements to libraries and organizations dedicated to animation will be a very wise step to boost Indian animation production.

It may sound like wishful thinking. But let me confess, it is. Yet it may not be complete in any sense of the word.  The amounts, please remember, are ANNUAL figures (for one year only) at today’s rupee value.  The Animation Industry in India requires just about Rs. 10 crores this year to start moving. Feel free to enlighten me before I put this across through representative bodies, so as to reach the Finance Minister well in time to consider and implement the suggestions.  And remember – take cartoons beyond kids, animate into motion and let’s create the productions qualitatively and quantitatively and earn the country loads of GDP, create the promised jobs and take Animation to the pedestal it deserves…