Manufacturers oppose licence fee plan for TVs, radios

NEW DELHI: Prasar Bharati proposes, the market disposes.

Prasar Bharati Corporation, the autonomous body overseeing the work of Doordarshan and All India Radio, wants to impose a licence fee on television and radio sets in the country to generate additional revenue, but electronics goods manufacturers are against it.

Prasar Bharati has also appealed to the government that the tax exemptions that were being extended to it earlier be restored. The exemptions were withdrawn during the presentation of 2002-03 Union Budget; a move that has not enthused the Prasar Bharati mandarins much, anyway.

Coming back to the licence fee matter, according to Prasar Bharati sources, the management committee of the corporation dwelled on the issue yesterday. However, no consensus was arrived at as there are "various pulls and pressure" working for and against the proposal.

At present, Prasar Bharati depends on the government for a major part of revenue in the form of grant. To reduce this dependency, it is searching for new areas for revenue generation.

The sources said that Prasar Bharati's yearly expenditure is estimated to be around Rs 20 billion for the current year. However, the organisation struggling to meet its annual earnings target, may end up with about Rs 7 billion through advertisements and other revenues from radio and TV. The gap between the expenditure and income would have to be adjusted by the government, by way of grants and loans.

Prasar Bharati wants to impose a one-time licence fee on all TV and radio sets sold in the country. Since the amount would become part of the cost of the goods purchased, the manufacturers' lobby is resisting the move.

For example, if a TV set now is retailed at the maximum price of Rs 9,500, an additional Rs 500 (assuming that's the licence fee) would take the price to Rs10,000, which would attract a different set of excise duties.

"In a bid to avoid higher excise duty (different price categories attract different sets of excise duties in India), the electronics goods manufacturers are not much in favour of a licence fee being imposed at the point when goods are sold," a Prasar Bharati source explained.

Why cannot the corporation resort to the mode of licence fee collection that was prevalent few decades back when a fee on radio sets was collected on an annual basis?

Simply because the cost of the whole process of licence fee collection would outstrip the amount collected and would also be cumbersome, sources point out, adding that earlier the fee was deposited in post offices by the radio set owners. "Maintaining the annual record and the final collection these days may prove to be too bothersome," a senior corporation official said.

Moreover, the government agencies too, are not too enthused, though the licence fee proposal would be discussed in detail in a board meeting of the Prasar Bharati, slated to be held in the middle of next month.

According to estimates, there are 125 million radio sets and 80 million TV sets in the country. If the government gives approval to this proposal, the licence fee collections will be a few hundred million per annum, an estimate points out. But then Prasar Bharati probably, cannot impose a licence fee with retrospective effect. It can be only done for all TV and radio sets sold as and when the proposal is notified.

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