The Finance Ministry’s push to increase Foreign Direct Investment (FDI) caps in media has hit a bottle-neck with the Ministry of Information and Broadcasting (I&B) yet to get back with its view on the matter. The Ministry, for its part, has been unable to turn around quickly due to a divided media industry and the nature of the consultations process.
By June-end, the Department of Industrial Policy and Promotion (DIPP), as per the recommendations of a Finance Ministry panel to increase FDI caps to 49 per cent in all media segments under the automatic route, asked ministries for their view. When asked about the status of the proposal, DIPP secretary Saurabh Chandra, said, “We are waiting for I&B Ministry to get back.”
I&B Minister Manish Tewari told The Hindu , “We are in the process of consultations. This is a deliberative exercise and we are applying ourselves to both the process as well as substance. As soon as we are able to reach a decision, we will get back.” On June 29, he held consultations with representatives of the broadcasting sector and print industry.
Informed sources said three major factors held up the decision, the first one being the divided view within the broadcasting industry.
General secretary of the Indian Broadcasting Foundation Shailesh Shah confirmed that the umbrella industry body had not taken a unified decision on FDI in news media. “We are for 100 per cent FDI in distribution and entertainment channels, and support increasing the cap to 49 per cent in non-news radio. But for news, our members have disparate views.”
The Hindu is given to understand that while certain big networks like Times Television Network, Network 18 and NDTV are broadly supportive, others like India TV, Sun, Eenadu and Malayalam Manorama Group have objected to an increase in FDI caps.
The second reason is that the Indian Newspaper Society (INS), an umbrella body of owners, proprietors, and publishers of print media, has not got back to the Ministry with a view. An industry source said, “There are both commercial and ideological factors. Many fear editorial control slipping away.” While the proposal was only to enhance the cap to 49 per cent, leaving the majority stakes with domestic owners, there was a perception it could bring in foreign investors “too close to control for comfort.”
The third reason is that any such decision has to be preceded by “extensive consultations.” In September 2012, FDI caps were increased in certain media segments, after a process that involved the Telecom Regulatory Authority of India.
A senior official said, “There is certain propriety in the process. We can’t depart from it and take unilateral decisions, without any logic. Why was it 26 per cent earlier? What justifies 49 per cent now? It can’t be arbitrary and has to go through all stakeholders.”
He added that limits fixed earlier have hardly been used on content and carriage. “If you have not hit the circuit-breaker yet, what is the case for upward revision? These questions have to be thought through.”
