Let’s not forget the public policy lesson in Sanju

Sanju is a biopic on bollywood superstar Sanjay Dutt’s dramatic and controversial life. While some viewers have been impressed by Ranbir Kapoor’s acting and the touching depiction of the circumstances under which Dutt committed the mistakes that he did (including but not limited to the illegal possession of three AK-56 rifles with ammunition), there are many who have dismissed the movie as a glorification of Dutt’s stupidity and bad boy character.

This post is not meant to analyse the movie itself but rather to discuss a possible counterfactual for Sanjay Dutt’s life- one in which he has no connections with the Underworld mafia. The Bollywood-Underworld nexus is a well known phenomenon. There have been some high profile cases where persons from the film industry have had dangerously close encounters with gangsters. For example, on January 21 2001,  Bollywood film maker Rakesh Roshan was shot in the arm and chest by Abu Salem’s gang members.

Bollywood filmmakers like Mahesh Bhatt and Rakesh Roshan frequently sought money from gangsters like Dawood Ibrahim and hence found themselves in awkward moments with the Underworld who were not afraid to threaten them with death if they didn’t meet their conditions. But why was the film industry seeking money from the Underworld instead of more formal sources? The answer lies in the Industries Act of 1951 which listed out all the industries that financial institutions could formally lend to. Until 2001, the ‘film industry’ was not one of the listed industries, so this meant that film makers could not borrow like entrepreneurs in other industries. Faced with a booming film market, film makers turned to the Underworld which was happy to finance films and also get a chance to hangout with the who’s who of the glitzy film industry.

Therefore, it seems like much of the Bollywood-Underworld can be explained as an unintended consequence of India’s attempt to regulate industries. Note that it’s perfectly  fine that governments are interested in regulating the financing of enterprises and economic activity. After all, we would not want formal financing of a kidnapping and ransom industry no matter how profitable it is. But the government could have taken a better approach where they could have published a ‘negative list’ of activities which were out of bounds for formal financial institutions. Not only would this avoided unintentionally providing the Mafia with an income source but it could have prevented the physical and emotional trauma faced by so many people in the industry. Governments are still paying the price for this mistake in the  form of  spending significant amount of resources to provide police protection to individuals and families who are still under threat from the Underworld.

In the movie, Sanju’s wife Manyata Dutt, played by Dia Mirza says referring to Sanjay Dutt: “Bad decisions make for good stories”. I’m not sure if the same can be said about the government policy discussed above.

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