The parallel Cinema

The Parallel Cinema movement began to take shape from the late 1940s to the 1965, by pioneers such as Satyajit Ray, Ritwik Ghatak, Bimal Roy, Mrinal Sen, Tapan Sinha, Khwaja Ahmad Abbas, Buddhadeb Dasgupta, Chetan Anand, Guru Dutt and V. Shantaram. This period is considered part of the 'Golden Age' of Indian cinema.[3][4][5] This cinema borrowed heavily from the Indian literature of the times, hence became an important study of the contemporary Indian society, and is now used by scholars and historians alike to map the changing demographics and socio-economic as well as political temperament of the Indian populace. Right from its inception, Indian cinema has had people who wanted to and did use the medium for more than entertainment. They used it to highlight prevalent issues and sometimes to throw open new issues for the public. An early example was Chetan Anand's Neecha Nagar (1946), a social realist film that won the Grand Prize at the first Cannes Film Festival.[6] Since then, Indian independent films were frequently in competition for the Palme d'Or at the Cannes Film Festival throughout the 1950s and early 1960s, with some of them winning major prizes at the festival.

During the 1950s and the 1960s, intellectual filmmakers and story writers became frustrated with musical films. To counter this, they created a genre of films which depicted reality from an artful perspective. Most films made during this period were funded by state governments to promote an authentic art genre from the Indian film fraternity. The most famous Indian "neo-realist" was the Bengali film director Satyajit Ray, followed by Shyam Benegal, Mrinal Sen, Adoor Gopalakrishnan, G. Aravindan and Girish Kasaravalli. Ray's most famous films were Pather Panchali (1955), Aparajito (1956) and The World of Apu (1959), which formed The Apu Trilogy. Produced on a shoestring budget of Rs. 150,000 ($3000),[7][8] the three films won major prizes at the Cannes, Berlin and Venice Film Festivals, and are today frequently listed among the greatest films of all time.[9][10][11][12]

Certain art films have also garnered commercial success, in an industry known for its surrealism or 'fantastical' movies, and successfully combined features of both art and commercial cinema. An early example of this was Bimal Roy's Do Bigha Zamin (1953), which was both a commercial and critical success. The film won the International Prize at the 1954 Cannes Film Festival and paved the way for the Indian New Wave.[13][14][15] Hrishikesh Mukherjee, one of Hindi cinema's most successful filmmakers, was named the pioneer of 'middle cinema', and was renowned for making films that reflected the changing middle-class ethos. According to Encyclopædia Britannica, Mukherjee "carved a middle path between the extravagance of mainstream cinema and the stark realism of art cinema".[16] Renowned Filmmaker Basu Chatterjee also built his plots on middle-class lives and directed films like Piya Ka Ghar, Rajnigandha and Ek Ruka Hua Faisla.[17] Another filmmaker to integrate art and commercial cinema was Guru Dutt, whose film Pyaasa (1957) featured in Time magazine's "All-TIME" 100 best movies list.[18] The most recent example of an impeccable art film becoming commercially successful is Harpreet Sandhu's Canadian Punjabi Film Work Weather Wife; it marks the beginning of Cinema in Punjabi Film Industry.[19]

In the 1960s, the Indian government began financing independent art films based on Indian themes. Many of the directors were graduates of the Film and Television Institute of India (FTII), in Pune. The Bengali film director Ritwik Ghatak was a professor at the institute and a well-known director. Unlike Ray, however, Ghatak did not gain international fame during his lifetime. For example, Ghatak's Nagarik (1952) was perhaps the earliest example of a Bengali art film, preceding Ray's Pather Panchali by three years, but was not released until after his death in 1977.[20][21] His first commercial release Aj