Ideas to unlock the value of Indian art

Seeking to know why India tends to undervalue its treasured art and artists, Deloitte India MD Roopen Roy makes some interesting observations. Following are the excerpts of a recent article by him in The Financial Chronicle:

“According to certain estimates, the business of art in India has probably touched $1 billion a year if one included all cross-border transactions. But a large part of this value is hidden in the parallel economy and much of the 'trading' is conducted under the fiscal radar. Indian artists and painters are becoming more prominent and coveted in the global art bazaar. High net worth individuals in India now have the urge of sourcing art from across the globe. Therefore, a thoughtful and sensible approach must be formulated by India.

The Ficci Committee on Art and Business of Art under Rakhi Sarkar released a report in April, entitled ‘Art Industry in India: Policy Recommendations’. One of its key recommendations was: the ministry of culture (which is directly under the prime minister) should craft and publish a National Art Policy in consultation with all stakeholders, which would include artists, industry, galleries, traders, collectors and buyers of art. A core objective of this policy should be the radical reduction of bureaucratic red tape.

There is a compelling case for simplifying procedures and streamlining the regulatory requirements to ensure that artists, art galleries and other stakeholders have a reduced number of touch points with government departments. The dice of the tax regime is loaded against the blossoming artists. Artists generally experience variations in their income levels due to irregular sale patterns. This fluctuation of income between tax years can be adverse for artists due to the progressive slab rates applying to individuals, which impose higher tax rates as taxable income increases.

To adjust the income fluctuations artists experience, one of the recommendations is to amend the tax laws and the artists to have an income-averaging concept. This concept prevails in Australia, Germany and other countries. Corporate philanthropy is encouraged in many other countries, such as Australia and the US. Corporate establishments contribute voluntarily to the art sector. The government should consider allowing a full expense deduction for the amount of donation made for the cause of art, the columnist concludes.