The Indian film industry is projected to be worth $3.3bn(R143bn by 2010, up from R$1.35bn according to a new industry report.

India is the world's largest producer of films by volume,producing almost 1,000 movies a year but accounts for only 1% of global filmindustry revenues, the report by consultant KPMG India and the Confederation ofIndian Industry said.

Producer Subhash Ghai, who heads CII's entertainmentpanel, said the government needed to play an active role in helping theindustry achieve its goal of growing at an annual rate of 18 percent.

"Piracy needs to be urgently checked to maximiserevenues for those putting their money into films and music. We also need tocreate a pool of quality professionals to keep pace with the technologicalprogress," he said.

The Indian film and music industry are the worst hit bypiracy and the KPMG report estimated the pirated films and music business inIndia at $206m a year.

The report also recommended that India tap into theoutsourcing of post-production works of Hollywood movies by taking advantage ofits low cost pool of 2.5 million experienced workers.

"The cost differential for post productionactivities between the United States and India could be as high as 1,000percent. India could be a formidable outsourcing player if it were to invest inappropriate world class equipment for post production," it said.

The report predicted the overall entertainment industry,led by the fast expanding television business, is likely to grow 165% to$13.4bn by 2010.

The exponential growth in the leisure industry -comprising television, film, music and radio - will be led by the introductionof newer technologies and wider content creation.

"The growth will also be aided by the overalleconomic growth of India and its rapidly growing affluent consuming classes andby the rising penetration of Indian content outside India," KPMG directorRajesh Jai said.

India's economy is poised to grow between 7% and 8% inthe year to March 2006, leading to increased spending on entertainment avenuesby its burgeoning middle class population of around 300 million, he said.

The television sector, which contributes over 60% of theentertainment industry's revenue of $5bn, will continue to power growth withdirect-to-home broadcasting, Internet Protocol based and interactivetelevisions.

Though films contributed only 27 percent of totalrevenues, they remained at the heart of India's leisure industry because oftheir superior visibility and impact.

"It is also a major driver for other sectors likemusic, live entertainment and television," the report said.