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NEW DELHI: The Information and Broadcasting Ministry has
asked the Finance Ministry to clear certain ambiguities in
the rules relating to foreign direct investment and has decided
to hold back licences to new broadcasters for the time being.
A senior I and B Ministry official clarified that the delay
in clearing applications from the broadcasters did not mean
any of them was being refused, and the aim was only to get
clarity and ensure transparency.
The official told indiantelevision.com that several issues
needed to be sorted out. These included the clear definition
of foreign direct investment, foreign institutional investor,
and non-resident Indian investments. Furthermore, there was
a question of how FDI was to be calculated if more than one
foreign investor was involved.
Earlier, a Finance Ministry source had told indiantelevision.com
that an announcement about the changed and simplified rules
was expected shortly. The relevant files had been referred
to the Foreign Institutions Unit (FIU) which would refer them
to the Foreign Investment Promotion Board after examination.
The examination by the Finance Ministry becomes important
in view of the overall cap of 26 per cent on foreign direct
investment. The specific purpose would also be to examine
the ownership pattern of the channels as the government regulations
say that the ownership of a channel uplinking from within
the country has to be Indian irrespective of the FDI investment.
Under the present rules, ‘While calculating foreign
equity of the applicant company, the foreign holding component,
if any, in the equity of the Indian shareholder companies
of the applicant company will be duly reckoned on pro-rata
basis, so as to arrive at the total foreign holding in the
applicant company. However, the indirect FII equity in a company
as on 31st March of the year would be taken for the purposes
of pro-rata reckoning of foreign holdings.’
Applications for starting around ten new television channels
have been referred to the Finance Ministry for veracity of
their claims about foreign investment. Proposals of seventy-one
private satellite channels from 52 different companies awaiting
permission as on April 30 to uplink from within the country
were at different stages of scrutiny, which included clearances
from other Ministries.
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