New Delhi, Aug. 22: Telecom regulator Trai today recommended that the foreign direct investment ceiling for television news channels be raised to 49 per cent from the current 26 per cent, a move that will bring relief to financially stressed news broadcasters.
The recommendation comes after the information and broadcasting (I&B) ministry recently asked Trai and the Press Council of India for their opinion on raising the FDI cap for the electronic and print media, respectively. The Press Council is yet to forward its recommendations.
Experts said the increased limit would help broadcasters reduce their dependence on advertisement revenues and access resources for their channels at competitive rates. The I&B ministry is now expected to send its approval to the finance ministry.
Trai has proposed raising the FDI cap for FM radio, too, to 49 per cent.
Earlier this year, the government had approved proposals to increase the FDI caps for 12 sectors, including defence and telecom, as suggested by a committee headed by economic affairs secretary Arvind Mayaram.
Stakeholders in news channels had argued for a higher FDI ceiling saying the 26 per cent cap “acts as a disincentive to prospective investors from infusing funds as they do not find it economically and financially beneficial”. This is why, they said, “hardly any news broadcasting company has been able to fully utilise its existing FDI limit”.
They had argued that the funds shortage was affecting their channels’ ability to gather and honestly report quality news, develop the best journalistic practices and attract talent. This, the argument went, was fuelling malpractices like paid news and private treaties.
Some news organisations, however, had countered that the news media were best left in Indian hands and that giving foreigners a controlling stake in content, especially in news, might lead to gradual manipulation of public views.
Trai, however, felt that there were enough safeguards against these dangers in the current uplinking guidelines.
“Existing guidelines and checks on FDI in news channels will continue as before. This means (i) requirement to employ resident Indians in key positions (CEO of the applicant company, 3/4th of the directors on the board of directors, all key executives and editorial staff); (ii) the largest Indian shareholder should hold at least 51 per cent of the total equity; (iii) reporting requirements when any person who is not a resident Indian is employed/engaged etc,” the regulator said in its letter to the ministry.