As the world reels under the weight of the worst financial crisis in the US since the Great Depression, the ripple effect is being felt in some unexpected quarters - the glitzy, starry world of Bollywood.

With banks becoming weary of giving out credit and lending to each other, Bollywood too is tightening its purse strings, citing lesser funds and an increasingly cautious audience, for whom entertainment could go down the priority list as they become more thrifty spenders.

"India may not be under direct threat, but the ripple effect of the global crisis is definitely reaching us in the entertainment industry. We have to cut costs, and make sure that we don't spend in areas that may not always be necessary," says Shailendra Singh of Percept Picture Company, which currently has as many as nine projects on the floors.

Singh says his company's mandate is to bring down spending and go in for projects that will get the audience's approval. "We can't now afford to experiment with tastes or make films that the audiences may not approve of. They are also going to be careful of the kind of money they spend on entertainment. If I make a bad film, my consumer will think twice before he spends Rs.300 on that product."

Bollywood is one of the largest film industries in the world, with a very loyal audience, and one that has attracted a great deal of foreign investment in the past few years. Major studios like Warner Bros, Sony Pictures and Walt Disney have all entered the Indian market in the last couple of years.

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