"In films, I want to share a story. If you don't have a good story to tell, no gimmickry is going to work," he said addressing a meet-the-press programme here.
Palekar, who is here to attend the national theatre festival organised by the Sathya Sai Orphanage Trust, said the younger generation of film makers have the advantage of technology to make quality films.
He said cinema "had not suffered degeneration after the sixties and seventies, which could be called the renaissance period of Indian art, be it theatre, literature or cinema.
"From that stage, artistic forms had to move up or down."
"Maybe in the coming 10 years, we can see something more exciting coming from young artistes. All is not rust," he said.
The film industry was mostly male-dominated and people were always looking for "salable heroes," he said, adding he made films only when he had a story to tell.
Asked whether he would return to acting, Palekar said "technically, I have not closed my acting shop. But the role should be good enough to be tempted."
Palekar's wife Sandhya Gokhale, who had scripted three of his films including `Paheli' starring Shah Rukh Khan and the latest bilingual venture `Dhaang' (Quest-Marathi/English), said all these scripts had women in central roles.