India's government is considering setting up a $45m seed fund to finance its national film sector.

A government committee, headed by N. K. Singh, has proposed a venture capital fund that would be managed through an asset management company based in India, with all contributions made to the fund to be exempted from tax under Indian tax laws

Over the past four years the Indian government has taken a number of steps towards establishing alternative and private financing models for the film industry. In October 2000 the Indian government recognised the "entertainment industry, including films" as an approved activity for extending loans under the Industrial Development Act of 1964.

Subsequently, the Reserve Bank of India laid out guidelines allowing commercial banks to invest in film production.

Since then, institutions such as the Industrial Development Bank of India have provided $20m in funds to 41 film producers. The Bank has already recovered $15m from its investments

The government committee comprises K V Kamath, Chairman and Managing Director, ICICI Bank; Pawan Chopra, former Secretary, Indian Information and Broadcasting Ministry and Vinod Rai, Additional Secretary (banking) as its members