In South India also many film makers and technicians come from "English Medium" background. But still they are quite proficient in their mother tongue.
English may have become a primary language for many of us and it is quite alright use it in work place amongst colleagues and also for official communications.
Films are different. Film is a piece of art. The main purpose of any art piece is conveying the thoughts and ideas of the film maker to the audience through conversations and visuals. Language plays a very important role there.
If you are making a film in a particular language it is important that you use that language when you are communicating with the team involved in the film making. Creating a right atmosphere for the actors is important and the language used on the sets contributes to that atmosphere.
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As for the quality of the spoken English used by the current generation the less the better it is.It's unbearable. They don't know their mother tongue well and their knowledge of English is also poor. They think that adding some faux accent to their speech is enough to make them look cool. This is true about the current generation of young actors.
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