Bollywood which churns out 200 films a year is feeling the heat of the global recession.

Project cancellations, mass lay-offs and delayed releases are haunting the world’s biggest cinema factory

Until recently, some Indian megastars were being paid up to $18 million per film. But big-budget projects with expensive names are the hardest hit in the slump. A-list actors like Shah Rukh Khan, Katrina Kaif, Akshay Kumar and Salman Khan are facing massive pay cuts.

“I have heard of pay cuts of 50% and more for artists,” says Vijay Khemka, president of the Film Federation of India.

Big corporations have made substantial investments in the film industry in the past few years and this has helped drive up project budgets and pay cheques. But as the Indian sharemarket has lost about half its value amid the global financial meltdown, funding for many film projects has evaporated.

Already this year several big-budget films have bombed at the box office, costing investors tens of millions.

About 800 films are released across India every year, with an annual worldwide audience estimated at 3.5 billion people.