Director Pooja Bhatt has been asked by T-Series CEO Bhushan Kumar to reduce the budget of new film "Kajra Re" as production houses that signed on Akshay Kumar and Salman Khan for huge amounts are having second thoughts about the deals. Bollywood is beginning to feel the pinch of the global economic meltdown.

Cost-cutting has become the buzzword of the world's biggest film factory now.

Though, initially, Bollywood tried to wish away the phenomenon, hoping it would not be affected by the economic slowdown, domestically at least the reality began to stare it in the face soon enough.

"The slowdown has been felt in the industry rather slowly, but it has now caught up with it, " trade analyst Komal Nahata said.

"However, it is difficult to say whether this has happened as a result of the global impact or due to the box-office disasters of recent big-budget movies, like 'Drona', 'Kidnap' and 'Karzzzz'. "But a sense of insecurity now pervades all production concerns, more so in Bollywood's corporates houses."

Nahata stressed that with a feeling of uncertainty ahead, the first priority in Bollywood is to cut costs wherever possible.

Referring to some Bollywood corporate houses that were acquiring movies at exorbitant prices without looking into their merits, Ashok Ahuja, a director of Percept Picture Company, said that they should now stop this practice and instead take up production themselves.

"Recently, two Bollywood corporate houses incurred losses to the tune of Rs.1.6 billion and Rs.600 million, respectively. Naturally both have now put on hold their planned acquisitions. This was bound to happen. But it has happened sooner than we expected, " Ahuja said.

An example of how the fear is taking hold can be gauged from the fact that T-Series CEO, Bhushan Kumar, recently told director Pooja Bhatt to reduce the budget of "Kajra Re", the movie she is to direct for the music company, even before it has gone on the floors.

Though Kumar cited no reason for the cost cutting, it is easy to understand that, after the indifferent box-office performance of its Himesh Reshammiya starrer "Karzzzz", the T-Series boss did not want to take an expensive risk in a second Reshammiya film - "Kajra Re".

By suggesting trimming of the movie's budget, Kumar was just being realistic. He guessed that "Kajra Re" might not fetch the price Reliance BIG Entertainment paid for "Karzzzz" for its marketing and distribution rights, and so it would be better not to splurge on another film.

According to a source, T-Series, which had signed a Rs.500 million deal with Salman Khan recently, told the star that it would not be able to see through the deal in its present form. Which means Salman will have to cut down his per movie price.

A similar message is said to have been conveyed to Akshay Kumar by UTV, which had signed a Rs.600 million deal with him. Pending Akshay's response, UTV has put the deal on hold for the present.

There is also a buzz in Bollywood trade circles that after "Karzzzz" turned out to be a damp squib, Studio 18 has shelved "Hhey Gujju", starring Himesh Reshammiya, which it had announced in June.

All the changes were made after the three companies realised that in the present uncertain entertainment market, the less money spent on the stars the better.

But not all in Bollywood are panic-stricken. UTV top boss Ronnie Screwvala, for one, is definitely not. He sees the current uncertain phase as a blessing in disguise as it has set the "cleaning process in the corporate clutter in motion".

"Cheap equities will soon disappear. Only the best and strongest will be able to stand high now, " he said.

In keeping with the need of the hour, Screwvala said, UTV would now be prudent in selecting movies. The box-office successes of movies like "Aamir", "A Wednesday" and "Welcome to Sajjanpur" have encouraged him to opt for small-budget movies, which are well-made and based on good content.

"We will continue to make big-budget movies with dependable partners, but the projects will be evaluated judiciously, " Screwvala said.

Kishore Lulla of Eros International explained succinctly how the chain reaction of slowdown would grip the industry, saying, "Look, with the liquidity crunch in the market, people now have less disposable income and so they will now spend less on luxury and entertainment - which means the movie-going clientele will decrease and so will the box-office collections.

"This will first affect the exhibition and distribution sector and consequently the production sector as it will have less money coming in from the two main sources - film exhibition and distribution. With less money on hand, producers will be forced to cut cost before the system gets corrected."

This, Lulla said, is a correction phase for the entertainment industry as well. "This is no time for any kind of bravado, " he added.

There is also no denying the fact that if star prices have hit the roof lately, the blame should lie with the Bollywood corporates themselves who tried to play the game of one-upmanship among themselves by piggy- riding on the willing stars.