>> Friday, May 29, 2009

History of Bollywood
Bollywood Celebrities

At the turn of this century, when the country was poised for major social and political reforms, a new entertainment form dawned in India-the Cinema. The first exposure to motion pictures which India received was in 1896, when the Lumiere Brothers' Chinematographe unveiled six soundless short films at Watson Hotel, Esplanade Mansion, Bombay on July 7. And the first exposing of celluloid in camera by an Indian and its consequent screening took place in 1899, when Harishchandra Bhatvadekar (Save Dada) shot two short films and exhibited them under Edison's projecting kinetoscope. Hiralal Sen and F.B. Thanawalla were two other Indian pioneers engaged in the production of short films in Calcutta and Bombay in 1900. Around 1902, J.F. Madan and Abdullah Esoofally launched their career with Bioscope shows of imported short films. In 1912 , N.G. Chitre and R.G. Torney made a silent feature film Pundalik which was released on May 18, and it was half British in its make.

Dhundiraj Govind Phalke, more generally known as Dada Saheb Phalke was responsible for the production of India's first fully indigenous silent feature film Raja Harishchandra which heralded the birth of the Indian film industry. The film had titles in Hindi and English and was released on May 3, 1913 at the Coronation Cinema, Bombay. In 1917, Bengal saw the birth of its first feature film-Satyabadi Raja Harishchandra made by Madan's Elphinstone Bioscope Company. In Madras, the first feature film of South India Keechaka Vadham was made by Nataraja Mudaliar in 1919.

After stepping into 1920, the Indian cinema gradually assumed the shape of a regular industry. The industry also came within the purview of the law. The new decade saw the arrival of many new companies and film makers. Dhiren Ganguly (England Returned), Baburao Painter (Savkari Pash), Suchet Singh (Sakuntala), Chandulal Shah (Guna Sundari), Ardershir Israni, and V. Santharam were the prominent film makers of the twenties.

The most remarkable things about the birth of the sound film in India is that it came with a bang and quickly displaced the silent movies. The first Indian talkie Alam Ara produced by the Imperial film company and directed by Ardershir Irani was released on March 14, 1931 at the Majestic Cinema in Bombay; The talkie had brought revolutionary changes in the whole set up of the industry. The year 1931 marked the beginning of the talking ear in Bengal and South India. The first talkie films in Bengali (Jumai Shasthi), Telugu (Bhakta Prahlad) and Tamil (Kalidass) were released in the same year.

The thirties is recognised as the decade of social protests in the history of Indian Cinema. Three big banners-Prabhat, Bombay Talkies and New Theatres gave the lead in making serious but gripping sand entertaining films for all classes of the wide audience. A number of films making a strong plea against social injustice were also made in this period like V.Santharam's Duniya Na Mane, Aadmi and Padosi, Franz Osten's Achut Kanya, Damle & Fatehlal's Sant Thukaram, Mehboob's Watan, Ek hi Raasta and Aurat. For the first time Ardeshir Irani attempted a colour picture in 1937 with Kisan Kanya.

The decade also witnessed the release of the first talkie films in Marathi (Ayodhiyecha Raja 1932), Gujarathi (Narasinh Mehta-32), Kannada (Dhurvkumar-34); Oriya (Sita Bibaha-34); Assamese (Joymati-35); Punjabi (Sheila-35) and Malayalam(Balan-38).

The decade during which the second world was fought and Indian independence won, was a momentous one for cinematography all over India. Some memorable films were produced during the forties such as Shantharam's Dr. Kotnis Ki Amar Kahani, Mehboob's Roti, Chetan Anand's Neecha Nagar, Uday Shanker's Kalpana, Abbas's Dharti Ke Lal, Sohrab Modi's Sikander, Pukar and Prithvi Vallabh, J.B.H. Wadia's Court Dancer, S.S. Vasan's Chandralekha, Vijay Bhatt's Bharat Milap and Ram Rajya, Rajkapoor's Barsaat and Aag.

The first International Film Festival of India held in early 1952 at Bombay had great impact of Indian Cinema. The big turning point camp in 1955 with the arrival of Satyajit Ray and his classic Pather Panchali which opened up a new path leading the Indian film to the World Film Scene. International recognition came to it with the Cannes award for best human document followed by an unprecedented crop of foreign and national awards. In Hindi Cinema too, the impact of neorealism was evident in some distinguished films like Bimal Roy's Do Bigha Zamin, Devadas and Madhumati, Rajkapoor's Boot Polish, Shri-420 and Jagte Raho, V. Shantharam's Do Aankhen Barah Haath and Jhanak Jhanak Payal Baaje, Mehbood's Mother India.

Gurudutt's Pyaasa, and Kagaz Ke Phool and B.R. Chopra's Kanoon; The first Indo-Soviet co-production Pardesi by K.A.Abbas was also made during the fifties. The transition to colour and the consequent preference for escapist entertainment and greater reliance on stars brought about a complete change in the film industry. The sixties was a decade of mediocre films made mostly to please the distributors and to some extent, meet the demands of the box office. The sixties began with a bang with the release of K. Asif's Mughal-E-Azam which set a record at the box-office. It was followed by notable productions which include romantic musical and melodramas of a better quality. Rajkapoor's Jis Desh Mein Ganga Behti Hai, Sangam, Dilip Kumar's Gunga Jamna, Gurudutt's Sahib Bibi Aur Gulam, Dev Anand's Guide; Bimal Roy's Bandini, S.Mukherji's Junglee, Sunil Dutt's Mujhe Jeene Do and the experimental Yaadein, Basu Bhatacharya's Teesri Kasam, Pramod Chakravorthy's Love in Tokyo, Ramanand Sagar's Arzoo, Sakhti Samantha's Aradhana, Hrishikesh Mukherji's Aashirwad and Anand, B.R. Chopra's Waqt, Manoj Kumar's Upkar, and Prasad Productions Milan were the significant Hindi films of the decade.

Among the regional languages, Malayalam cinema derived much of its strength from literature during the sixties. Malayalam cinema hit the head lines for the first time when Ramu Kariat's Chemmeen (1965) won the President's Gold Medal. Towards the end of the decade, Mrinal Sen's Bhuvan Shome, signalled the beginnings of the new wave in Indian Cinema.

The New Indian Cinema emerged as a reaction to the popular cinema's Other Worldiness. It is a cinema of social significance and artistic sincerity, presenting a modern, humanist perspective more durable than the fantasy world of the popular cinema.

Satyajit Ray, Ritwik Ghatak and Mrinal Sen were the founding fathers of the new cinema in India. Acclaimed as India's foremost director Satyajit Ray has made 30 feature films and five documentaries, tacking a wide range of rural, urban historical themes. His cinematography places him away form the inheritors of the neorealist school, and yet his films are infused with an unusual humaneness. Pather Panchali, Apur Sansar, Charulata, Jalsaghar, Goopy Gyne Bagha Byne, Seemabadha, Jana Aranya, Ashani Sanket and Agantuk are some of his outstanding films. He was fortunate enough to present his films in almost all the leading films festivals of the world. The national and international awards won by Ray are numerous.

Ritwik Ghatak swooped on the Indian scene with new dynamism. His films constitute a record of the traumas of change form the desperation of the rootless and deprived refugees from East Bengal .(Meghe Dhaka Tara, Ajantrik, Komal Ghandhar, Subarnarekha). Mrinal Sen is the ebullient one-experimenting with neorealism as well as new wave and fantasy. His notable films are Bhuvan Shome, Chorus, Mrigaya, Ek Din Pratidin, Akaler Sandhane, Kharij & Khandahar. He has also won several national an international awards.

In Bombay, a new group of film makers emerged on the Hindi cinema. Notable amongst them are Basu Chatterji (Sara Akash), Rajinder Singh Bedi (Dastak), Mani Kaul (Uski Roti, Duvidha), Kumar Shahani (Maya Darpan), Avtar Kaul (27-Down), Basu Bhattacharya (Anubhav), M.S. Sathyu (Garam Hawa), Shyam Benegal (Ankur), and Kanthilal Rathod (Kanku). In Calcutta, following the trend set by Ray, Ghatak and Sen, Tapan Sinha and Tarun Majumdar also made some note worthy films. (Kabuliwala, Hatey Bazarey, Harmonium, Safed Haathi; Balika Bodhu, Nimantran, Ganadevta, Dadar Kirti).

The seventies has further-widened the gap between multistar big budgeted off beat films. The popular Hindi hits of the decade include Kamal Amrohis Pakeeza, Rajkapoor's Bobby , Devar's Haathi Mere Saathi, Ramesh Sippy's Sholay, Zanjeer, Deewar, Khoon Pasina, Yaadon Ki Baarat, Kabhi Kabhi, Dharamveer, Amar Akbar Anthony, Hum Kisise Kum Nahin, and Muqaddar ka Sikandar. Of these majority of the films were action oriented with revenge as the dominating theme.

Down in the South, the new wave cinema originated in Karnataka and Kerala. Pattabhi Rama Reddy's Damskara (70) and Adoor Gopalakrishnan's Swayamvaram (72) were the trend setters in Kannada and Malayalam respectively. This continued with a series of socially conspicuous films like M.T. Vasidevan Nair's Nirmalyam, B.V.Karanth's Chomana Dudi, Girish Karnad's Kaadu, Girish Kasara Valli's Ghatasradha, G. Aravindan's Uttarayanam and Thamp, K. Balachander's Arangetram, Avargal and Apoorva Ragangal, Adoor's Kodyettam, K.G. George's Swapnadanam and P.A. Backer's Chuvanna Vithukal and G.V.Iyer's Hamsageethe.

The Hindi avante garde or new wave seems to have reached its bloom period towards the end of the seventies with the coming of film makers like Govind Nihalani (Aakrosh), Saeed Mirza (Albert Pinto Ko Gussa Kyon Aata Hai, Aravind Desai ki Ajeeb Daastan), Rabindra Dharmaraj (Chakra), Sai Paranjpe (Sparsh), Muzafar Ali (Gaman) and Biplab Roy Chowdhari (Shodh). The movement spread to the other regional cinemas such as Marathi, Gujarathi, Assamese, Oriya and Telugu. Directors like Jabbar Patel (Samna, Simhasan), Ramdas Phuttane (Sarvasakshi), Ketan Mehta (Bhavni Bhavai). Babendranath Saikia(Sandhya Rag), Jahanu Barua (Aparoopa, Papori), Manmohan Mohapatra (Klanta Aparanha, Majhi Pahacha), Nirad Mohapatra (Maya Miriga) and Gautam Ghose (Ma Bhoomi) came to the scene with their films.


Also from the South came film makers such as Jayakantan, John Abraham, Bharathan, Padmarajan, Balu Mahendra, Bharathi Raja, T.S. Ranga, T.S. Nagabharana, K.R. Mohanan, G.S. Panicker, Chandrasekhar Kambar, P.Lankesh, C. Radhakrishnan and Bhagyaraj who presented significant films like Unnai Pol Oruvan, Agraharathil Kazhuthai, Prayanam, Peruvazhiambalam and Oridathsoru Phayalvan, Kokila, 16 Vayathinile and Kizhakke Pokum Rail , Geejegand Goodu, Grahana, Aswathama, Ekakini, Kaadu Kudre, Pallavi, Agni, Suvar Illatha Chithrangal and Mundani Mudichu.

The new cinema movement continued with full spirit in. the next decade (eighties) also . Shyam Benegal presented some good movies like Manthan, Bhumika, Nishant, Janoon , and Trikal. Nihlani's Aaghat and Tamas were remarkable works. Other important films with new style of treatment include Damul (Prakash Jha), 36-Chowringhee Lane (Aparna Sen), New Delhi Times (Ramesh Sharma), Mirch Masala (Ketan Mehta), Rao Saheb (Vijaya Mehta), Debshishu (Utpalendu Chakraborthy), Massey Saheb (Pradeep Kishna), Trishagni (Nabayendu Ghosh), Ijaazat (Gulzar), Umrao Jaan (Muzafar Ali), Dakhal, Paar (Gautam Ghose), Dooratwa, Neem Annapurana, Andhi Gali (Buddhadeb Dasgupta), Aajka Robin Hood (Tapan Sinha), Tabarana Kathe, Bannada Vesha (Girish Kasara Valli), Accident & Swamy (Shanker Naag), Daasi (B. Narasinga Rao) and Phaniyamma (Prema Karanth).

The new wave masters of Kerala, Adoor and Arvindan, consolidated their position in the eighties with their films Elippathayam, Mukha Mukham, Anantharam, Esthappan, Pokkuveyil, Chidambaram, and Oridath, Elippathayam has won the prestigious British film Institute award for 1982. Shaji N.Karun's maiden film Piravi(1988) bagged several national and international awards and was shown in nearly forty film festivals. Meera Nair, the young woman director, won the Golden Camera award at Cannes for her first film Salaam Bombay in 1989. In 1990, Adoor Gopalakrishnan's Mathilukal won the FIPRESCI and UNICEF awards.

The late eighties and early nineties saw the revival of the musical love stories in Hindi cinema. Mr. India, Tezaab, Qayamat se Qayamat Tak, Main Pyar Kiya, Chandni, Tridev, Hum, Ghayal, Saudagar, Rakhwala, Jo Jeeta Wohi Sikander, Hum Hain Rahi Pyarke, Baazigar, Aaina, Yeh Dillagi, Hum Apake Hai Kaun, Krantiveer, Raja and Rangeela were some of the popular Hindi films of the last decade.

The first half of nineties witnessed the release of some better films in Hindi as well as in other regional languages. Drishti and Drohkal (Nihalani), Lekin (Gulzar), Disha (Sai Paranjpe), Prahar (Nana Patekar), Parinda (Vinod Chopra), Diskha (Arun Kaul), Kasba (Kumar Shahani), Rudaali (Kalpana Lajmi), Maya Memsaab (Ketan Mehta), Mujhse Dosti Karoge (Gopi Desai), Suraj Ka Satwan Ghoda & Mammo (Benegal), Who Chokri (Subhankar Ghosh)&Ek Doctor Ki Maut (Tapan Sinha), were some of the notable Hindi films from Bengal, Orissa, Assam and Manipur came films like Tahader Katha, Bagh Bahadur, Charachar (Buddhadeb Dasgupta), Uttoran (Sandip Ray), Wheel Chair (Tapan Sinha), Unishe April (Rituparno Ghosh), Adi Mimansa, Lalvanya Preethi (A.K. Bir), Nirbachana (Biplab Roy Chowdhari), Halodhia Choraya Baodhan Khai, Firingoti (Jahau Barua), Haladhar (Sanjeev Hazarika), and Ishanou (Aribam Shayam Sharma). In the South Malayalam Cinema presented some notable films. They include Vasthuhara (Aravindan)_, Vidheyan (Adoor) Kireedom, Bharatham (Siby Mmalayil), Amaram (Bharathan) Innale (Padmarajan), Oru Vadakkan Veeragatha, Sargam, Parinayam (Hariharan), Devasuram (I..V.Sasi). Kilukkam, Thenmavin Kombath (Priyadarsan), Perumthachan (Ajayan), Daivathinte Vikurthikal (Lenin Rajendran), (Sivan), Manichithrathazu (Fazil), Ponthanmada (T.V. Chandran) and Swaham (Shaji), From Tamil and Telugu cinema, there came few films like Anjali, Roja and Bombay (Mani Ratnam) ,Marupakkam and Nammavar (Sethsumadhavan),Karuthamma (Bharathi Raja), Surigadu (Dasari Narayana Rao), Swathi Kiranam (K.Viswanath), Mogha Mul (G.Rajasekharan) etc. English film like Miss Beatty's Children (Pamela Rooks), and English August (Dev Benegal) were also produced during this period.

All in all, it has been a long story of nearly nine decades, with the early shaky screen images turning into a multi pronged and multi winged empire of its own, that has yielded about 27,000 feature films and thousands of documented short films. Cinema has raised India's flag high in the world as the consistently largest film producer. But when it comes to quality the flag has to fly half mast.
All the above information is courtesy of: All India.

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Second season of ‘10 Ka Dum’ to start along Salman Khan

On following Sunday, it would be second innings for the quiz show “10 Ka Dum” as this time there is more expectation from Salman Khan, who really made its first season a big hit. The quiz show once again is set for winning prize of Rs. 10 crore. The show suitable for a family viewing had one of the highest TRPs in Indian Television history. On the first episode of second season on coming Saturday it is Kareena and Karisma Kapoor who are participating in it.

“10 Ka Dum” is starting on, May 30th at 9PM only on Sony Entertainment Television. Below are a few pics from the same show.



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‘KABUL EXPRESS' invited to London & Pusan Film Festivals

>> Thursday, May 28, 2009

THE 'EXPRESS' ROLLS INTO THE MOST PRESTIGIOUS STATIONS IN THE WORLD!

'Kabul Express', the latest Yash Raj Films production is creating waves all around the world. Barely has the excitement around the invitation to the Toronto International Film Festival died down, comes the news from Yashraj Films site that the Kabir Khan helmed film has been invited to participate in the London Film Festival and the Pusan Film Festival.

Slated to be held this year from 18th October to 2nd November, 2006, the London Film Festival is one of the pre-eminent film festivals of the world. This year is even more significant for the festival as it marks the 50th anniversary, having been started in 1956. The Festival also has a strong Indian connection in that it awards the annual Satyajit Ray award: a special award for the first time film maker whose work captures best the artistry, humanity and vision of Satyajit Ray. In its 11th year now, the award is much sought after by first time directors.

The Pusan Film Festival has quickly gained acceptance among cineastes as being the most prestigious film event in Asia. In addition, it is well accepted as a forum for discovering bright new talent and showcasing some of the most cutting edge cinema from around the world. This year, the festival will be held from the 12th to the 20th October.

Coming on top of the recent invitation to participate in the Toronto Film Festival, these honors to 'Kabul Express' clearly demonstrate that there are truly no boundaries any more for Indian cinema.

Said Yash Raj Films Chairman, Yash Chopra, "We are proud that 'Kabul Express' is receiving invitations to the most prestigious festivals in the world — and rubbing shoulders with the best in world cinema. We are certain that the film will find great favor not just with critics and festivals juries but with discerning audiences the world over!"

Clearly, 'Kabul Express' is on a roll; and Indian and global audiences will have a unique cinema experience in store for them, when the movie releases in India

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Palampur Express’s connection

It’s very commonly seen and noticed by us that most of the reality shows on the television are inspired by the international shows. But there is a new show on television which looks like as if it has taken its inspiration from an advertisement. Yes, we are talking about the show Palampur Express from whose promos we can make out that it has somewhere taken its inspiration from the famous Tata Indicom advertisement which used to come on TV few months back. In this ad there was one small town girl who aspires to become an athlete and she wakes up early in the morning to keep herself fit and this is the same feeling which we get when we see the promos of Palampur express. The concept of the ad was quite nice but we really don’t know whether the show is fully on the concept or only a theme has been taken. But whatever it is, we will get to know after the show comes on air .And we hope that we get to see some nice and good concept through this inspirational show.

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Sonali Bendre and Aishwarya are family

Sonali Bendre has been off films for a while but is still connected to Bollywood, thanks to TV and producer/director Goldie Behl.

She’s close to the Bachchans as Goldie happens to be a chum of Abhishek Bachchan. The friendship with Bachchan Jr. is still quite strong, despite the fact that both the movies these two did together- ‘Bas Itna Sa Khwab Hai’ and ‘Drona’ turned out to be superflops.

Homely Sonali who’s rocking as a mum too now considers her contempory for some years in the industry and who she starred with in ‘Humara Dil Aapke Pas Hai’ many years ago-Aishwarya Rai family.

She’s said: “Aishwarya is family. She is Abhishek’s wife and will always be extremely special. Like I keep telling her that she is extremely sweet but for us she will always be Abhishek’s wife who is so dear and I think she is very happy to accept that.”

Well, it’s nice to know that two beautiful woman can bond like friends and family. This in a place like B-Town is rare as they always end up only squabbling

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Aditya Chopra to direct Madhuri in next film?

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Aditya Chopra to direct Madhuri in next film?

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Bollywood stars to play cricket match for cancer cause

Cancer Patients Aid Association (CPAA) at Hotel Taj Lands End on Saturday May 23rd evening announced the line up of events for celebrating World No Tobacco day in association with Bollywood stars, World Health Organisation (WHO) and The Ministry of Health and Welfare.

Present at the event were Bollywood personalities - Sohail Khan, Aftab Shivdasani, Milind Soman, Neetu Chandra, Raima Sen, Dr. Anuj Saxena, Arjan Bajwa, Bappi Lahiri, Shailendra Singh of Percept Pictures along with cricketer Vinod Kambli. Also present were CPAA, WHO and the Ministry officials comprising of Mr. Y.K. Sapru, P.S. Pasricha and D.J. Habayeb.

It was announced that Bollywood n Television stars would play against Mumbai city doctors a special cricket match on Monday May 25th at the Mumbai Police Gymkhana at Marine Lines, Mumbai at 4 pm. While the Bollywood stars interacted with the media about the same, they also participated in a mock holi and threw tobacco based products in it.

It was announced that special guests of honour at the match are going to be Farah Khan and actor-producer Dr. Anuj Saxena, who will felicitate the film personalities and handover voice boxes (prosthesis) to cancer patients who have lost their voices due to the disease. The celebrities will also be participating in the charity event will be Sohail Khan, Zayed Khan, Riteish Deshmukh, Suniel Shetty, Javed Jaffery, Arjan Bajwa, Chetan Hansraj, Aman Verma, Cyrus Broacha, Milind Soman, Vinod Kambli, Bakhtiyar Irani and many more. Through the match, the institutes hope to raise funds as well as spread awareness about cancer.

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Barbara Mori insisted Hrithik to Kiss her

Bollywood News : While maintaining that no big deal should mori barbara kites1 Barbara Mori insisted Hrithik to Kiss herbe made out of an onscreen kiss, Hrithik Roshan did admit that it was his Mexican co-star Barbara Mori who asked him to kiss her on the lips in a scene in Kites .

There is a sequence in ‘Kites’ where the characters played by Hrithik and Barbara jump from a building. Director Anurag Basu decided to include a kiss between the two before they do the stunt. Though Hrithik gave Barbara a peck on her cheek, she asked for a smooch. But there was a reason behind it.

“We were both supposed to jump off from a rooftop at an impossible height. Before we did so our director Anurag Basu suggested to kiss Barbara, since we were doing something death-defying and dangerous and potentially lethal. I reached out and kissed her on the cheeks,” Hrithik is quoted as saying in a news report.

However, Barbara thought a peck on the cheeks would not look good enough in the scene.

“Barbara turned around to ask why I had kissed her on the cheek. ‘Given the same situation with your real-life wife, Suzanne, would you kiss her on the cheek?’ I was floored by her logic,” said Hrithik.

Then Hrithik did what was right. He kissed her on the lips.

“And this time I kissed her the way real-life couples would in the situation. On the lips,” said Hrithik.

Hrithik added that the kissing scene was done so tastefully, that he could watch it with his family and parents.

“In fact, I’d be more than happy and completely comfortable watching those kissing scenes with my wife, son and parents when the film is released,” Hrithik said.

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Obama's tax proposals won't stop outsourcing to India

Few would argue that in recent years, globalisation has increasingly come to be synonymous with the trend of outsourcing; a trend that has changed the global equation. The phenomena of outsourcing has allowed emerging markets in developing countries to reach into developed economies, offering a talented workforce at a fraction of the price.

However, with the recent tax proposals of the US, multinational US Companies which make more than 50% of their revenue from markets outside the US and the Indian industry, which earns $60 billion from outsourcing, are panic-stricken. The new US tax proposals intend to (i) curb overseas tax advantages enjoyed by multinationals in the US; (ii) change the legal treatment of international subsidiaries that companies have used to shift earnings into low-tax offshore havens; (iii) reduce the role of small tax-haven countries that have eroded the tax bases of US; and (iv) eliminate an ambiguity that allows US multinationals to avoid paying taxes on profits earned overseas. Further, it is believed that with rise in the taxes paid on the profits earned overseas, the US companies will shift their location of business back to US.

Existing US Tax Code

The present US Deferral System allows US companies earning profits in a foreign country to deduct expenses for overseas operations and defer payment of US taxes until those profits are repatriated back to the US. While several developed countries have shifted to territorial tax system where only company profits generated within a country's borders are subjected to tax, the US is the only country in which both a worldwide system and a corporate tax is applied. Hence, US tax regime provides for Deferral System to enable US multinational companies operating in foreign countries to be on a more equal footing with their competitors. However, this Deferral System is under attack from the US administration as US multinational companies are increasingly found to be evading taxes by shifting their earnings into low-tax offshore havens and enjoying overseas tax advantages.

Hence, the US administration intends to reform the Deferral System by limiting the ability of US companies to defer tax on profits earned abroad. The new US administration proposes to curtail US multinationals from (i) receiving deductions for expenses supporting their overseas investments until they pay taxes on their offshore profits; (ii) inflating or accelerating the foreign tax paid to claim credit against the US taxes; and to make the Research and Experimentation Tax Credit permanent for investment in the US.

Implications of the New Tax Code

Though the proposal of the new US Tax Code is still at an early stage, the immediate impact on the Indian outsourcing industry cannot be accurately assessed, as the transition of this proposal into legislation will involve extended debates, expert opinions and oppositions from US multinationals, republicans, and even democrats. Even assuming that the proposal of the new US Tax Code comes into force, it is an attempt by the US administration to reduce the role of small tax-haven countries that have eroded the tax bases of US rather than targeting the outsourcing industry of India in general. However, the proposed new US Tax Code may impact foreign operations of US companies operating abroad and makes it more difficult for them to compete with foreign companies.

RandD Outsourcing

RandD is considered as one of the important factors for economic growth of a country. Recently, RandD outsourcing industry of India has grown immensely and deals with all major sectors like IT, telecom, auto, research and pharmaceuticals. Presently, US tax code allows US multinationals to claim immediate deductions for expenses supporting their overseas investments and defer payment of US tax until those profits are repatriated to the US. In order to curb avoidance of tax, US proposes to provide deductions to US multinationals on overseas expenses only if they pay taxes on their offshore profits.

However, in its new tax proposal, the US has exempted the overseas Research and Experimentation expenses enabling US multinationals to receive immediate deductions on their US tax returns. Hence, even if the new tax proposal transforms into legislation, it should not have a significant impact on the RandD outsourcing industry of India.

Structuring the Outsourcing

In a global economy where capital flows freely across borders, it will be difficult for the US administration to restrict multinationals from investing in India. Most US multinational companies do not invest in India only to take advantage of the deferral system existing in the US tax code. In case, the US administration legislates the proposed tax code, it may lead to US multinationals conducting a detailed analysis of economic benefits of outsourcing a particular service and outsourcing only those jobs to India which produces higher profits when outsourced to an Indian subsidiary in comparison to the taxes associated with outsourcing such jobs.

In such a scenario independent BPO units will have to be more competitive and captive BPOs will have to look at maximising their profits by cutting costs. However, it is unlikely that outsourcing would yield less profit considering India's potential to provide highly skilled manpower, cost-effectiveness, and proximity to fast-growing Asian markets.

The Indian government may also have to consider revising and upgrading the existing sops to BPOs including tax incentives. BPOs may consider shifting operations to suburban and rural India to avail benefits of cheaper labour and the likely tax and infrastructural incentives provided by the government.

Outsourcing is an economic reality and cannot be curtailed by changing the tax code applicable to the outsourcer and most economic and business experts would agree that India will remain a lucrative investment destination for the US as it continues to offer skilled manpower, large and inexpensive labour force and immense growth potential. Even in case the US administration succeeds in bringing the new tax code into force, decisions on outsourcing will still not rest in their hands. Businesses, large and small, will continue to be driven by and to do what they believe is best for survival and growth.

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