Media firms push for higher FDI cap as govt mulls review of limits

With the government reviewing the current foreign direct investment norms and a possible hike in FDI caps across telecom, defence and other sectors, media companies too have joined the bandwagon making a case for increasing the FDI cap in news channels from 26% to 49%, and a further hike in the DTH FDI cap from 74% to 100%.

Broadcasters and media houses — both national and regional entities — have pointed out to the growing losses of both news and DTH companies due to limited revenue earning opportunities.

Making a case for increasing the FDI cap for news channels, a leading broadcaster said the health of the Indian electronic news media is in an extremely bad shape. "The news channels are not able to invest adequately on quality content creation, journalistic talent, introduction of new technologies and also innovation. Infusion of funds from abroad will create enabling grounds for quality journalism and it will also entail a healthy transfer of global best practices in news reporting," the broadcaster said in a letter written to the commerce and industry minister Anand Sharma recently.

The letter, written on behalf of some of the leading broadcasters, further said the move will ensure greater employment and increased income generation culminating in inclusive growth for the entire country.

Using various industry platforms like the confederation of Indian industries (CII), federation of Indian chambers of commerce and industries (Ficci) and various industry associations, media have submitted their demands to the department of industries policy and promotion (DIPP) for consideration.

Incidentally, increasing the FDI cap in news broadcasting from 26% to 49% was also recommended by an in-house government panel constituted by the information and broadcasting ministry.

Putting its weight behind the proposal, industry chamber CII and Ficci too have said there are adequate checks and balances that exist in the extant uplinking and downlinking guidelines and regulations playing out at the sectoral level. "Therefore, there is no harm in increasing the FDI limit to 49% for television news business," said a senior functionary in the industry body. He said in an age of internet and social media, the cap on FDI for news media business does not serve any meaningful purpose.

Last year, the Sectoral Innovation Council under the I&B ministry too had supported increasing the FDI cap in news broadcasting space to 49% in order to support the growth of news channels.

According to one estimate, between the six private DTH operators, the combined losses are expected to be above R6, 000 crore while most of the 400-plus news channels are clocking losses.

Source: Financial Express

Source: http://cablequest.org/news/national-news/item/2611-media-firms-push-for-higher-fdi-cap-as-govt-mulls-review-of-limits.html
Source: http://cablequest.org/news/national-news/item/2611-media-firms-push-for-higher-fdi-cap-as-govt-mulls-review-of-limits.html