@ FICCI Frames: Stimulus Package, DTH License Fee, HITS Policy, Content Regulation


Information and Broadcasting Minister Anand Sharma and I&B secretary Sushma Singh clarified some policy decisions on the sidelines of the conference.

DTH License fee reduction: The ministry’s move to reduce the license fee for DTH players from 10% of gross revenue to 6% may soon bear fruition. Secretary Singh said the ministry may be able to announce this soon. This process has been on for nearly a year. Due to the multiplicity of agencies–telecom regulator TRAI, I&B ministry and the finance ministry are involved in this decision–the file seems to have been moving back and forth for nearly an entire year. One DTH industry source, who has followed the policy change closely, told us that the first time around, the finance ministry had some reservations about the change after I&B ministry and TRAI had approved the change. So the ministry had to make some amendments and get TRAI recommendation once again and the file has gone back again to the finance ministry. Singh’s reiteration of the decision may be an indication that the ministry is expecting the finance ministry’s nod soon.

HITS policy soon: We have been hearing this for a long time to take ‘soon’ at face value. However, minister Anand Sharma confidently said, “we are ready with it, expect it any time now”. I asked him if we can expect the policy in a week, to which he replied he couldn’t commit to a deadline.

DAVP rate hike
: The mandatory discount of 15% in DAVP ads has been done away with, Sharma said, adding that the rate itself has been raised by 10% across the board (note that we had earlier reported a 15% rate hike, citing Business Standard). With this clarification, we now know that the effective increase is 25%. Are there more components to the stimulus package than what has already been announced? “We believe adequate measures have been taken,” Sharma said. At the Frames conference, the film industry has made a pitch for some kind of a stimulus and Sharma said the government will consider it.

No content regulation
: “We are not considering any policy to regulate news content,” Sharma said categorically, adding that he is responding to the same question in Lok Sabha tomorrow. The government is working on an interface with the industry to that all decisions are taken after a thorough consultative process. Sharma said the government’s talks with news channels after the coverage of the Mumbai terror attacks were all part of this consultation process.

No comments on FDI tweak
: The minister refused to say if effective FDI in news media will go upto 49% after the recently announced changes by the commerce ministry.



"The minister refused to say if effective FDI in news media will go upto 49% after the recently announced changes by the commerce ministry."

Why will it go up only to 49%? I think technically it can go upto over 62%:

Indian Company (IC) and Foreign Company (FC) setup a holding co (HC) with IC having 51% as well as 'mgmt control' and FC having 49%. This HC invests 74% in a news media company (NMC) and now its entire holding is treated as non-FDI since the IC has majority ownership and real mgmt control of HC. The FC again puts in the maximum allowed FDI of 26% into the NMC. Thus NMC has 26% FDI and 74% "Indian money" according to the new rules.

FC's real stake though (as would have been calculated before the new rules) is (49% of 74) + 26 = 36.26 + 26 = 62.26%

Thus the new rules allow a sectoral cap of 26% FDI to effectively be raised to slightly over 62% FDI

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