His 2006 film "Khosla Ka Ghosla" proved how well-told stories, without a star-studded cast or a mega budget, can rock the box office.
"The fact is that the change started with 'Khosla ka Ghosla'. It's been a welcome change - to have good, small budget films with simple stories, do well with all kinds of audiences, and it is important for such a change to come as it adds more pluralism to the industry, " Banerjee told.
The 40-year-old, who also helmed small budget, critically acclaimed and commercially successful films like "Oye Lucky! Lucky Oye!" and "Love Sex aur Dhokha", feels the filmmakers can reap better results if they dig deeper into Indian roots.
"I think there's so much within India, in the interiors of India. There is a large pool of talent in the country and so many local stories waiting to be told. But we need to stop being elitist and stop catering just to the English-speaking market. That endangers the existing talent in the nooks and corners of the country.
"I agree that the well-educated minds and business-inclined people may control the industry, but if the genuine Indian talent from interiors fails to come to the fore, it can kill the bio-diversity of the industry, " said the adman-turned-filmmaker, who believes "Peepli Live" was a perfect example of simple, local talent lauded by the audience and critics alike.
For now, Banerjee is looking forward to his next project "Shanghai", which focuses on corruption and the revenge of the common man.
"Shanghai" is based on a mid-1960s book, "Z", by Greek writer and diplomat Vassilis Vassilikos. Slated for a Jan 26, 2012 release, it is a political thriller, starring Abhay Deol, Emraan Hashmi and Kalki Koechlin.
The film has been shot in places like Latur and Baramati in Maharashtra.
"I can't reveal the costs...but I have to admit that this is my highest budget film so far. The budget is not big at all, but for the kind of subject that it deals with, it has a fairly good budget, " said Banerjee.