CHAPTER - 4

FINANCING THE PRASAR BHARATI

4.1 A question often posed is whether independent functioning of the Corporation is likely to be hamstrung if it were to depend on Government funding. We feel that such misgivings are baseless. Dependence on the grant-in-aid from the Government does not necessarily lead to an abridgement of autonomy. It is reassuring to remind ourselves that hoary institutions such as judiciary and the Press Council, the latter an example from the media world itself, are government-funded but have remained fiercely independent. However, it should be the endeavour of Prasar Bharati to become financially self-reliant over the years.

4.2 Government budgetary grant is the primary source of sustaining Akashvani and Doordarshan in the present scheme of things. The Akashvani and Doordarshan (Commercial Services Revenue) Non-lapsable Fund was created in 1977. This Fund commonly known as Non-lapsable Fund (NLF) is derived from the net advertising revenue. The Fund was originally intended to facilitate improvements in software generation. Subsequently, it was also used for funding improvements in hardware and for training needs. The non-Plan revenue budget includes transfer to NLF. Even Doordarshan, despite its gross advertising revenue of Rs. 430 crores last year, is able to recover only about one-third of its annual expenditure. The following table gives the budget, both revenue and capital juxtaposed with gross commercial revenue of Doordarshan and Akashvani during the last four years:-

DOORDARSHAN :

AKASHVANI:

4.3 Government of India, at least during the initial years, will have to fund Prasar Bharati to enable Akashvani as well as Doordarshan to meet not only their revenue expenditure but also their capital expenditure. The latter is bound to be formidable during the Ninth Five Year Plan. It is tempting to suggest that different user-ministries should make available a portion of their grant to Akashvani and Doordarshan depending on the airtime devoted to the respective Ministries, for dissemination of information concerning their activities. We have received suggestions to this effect from several quarters. The notional cost of the programmes put out by Akashvani and Doordarshan by way of support to the multi-media campaigns launched by different Ministries will be stupendous. 'Me moot question is whether these two organisations should continue to lend such support free of cost or at least recover the cost on a subsidised basis. We prefer the latter option not so much because Prasar Bharati will be funded by the Government but owing to its public service commitment.

4.4 In our opinion, the Prasar Bharati should formally have a share capital. We recommend an authorised share capital of say Rs. 5,000 crores and paid-up capital of say Rs. 2,000 crores. Against the allotment of shares to the Government, the Government will transfer part of the assets of Doordarshan and Radio at present, to the Prasar Bharati. The hardware at the disposal of AIR and Doordarshan of the estimated value of Rs. 55,000 crores can be transferred on a 99-year lease to the Prasar Bharati Corporation. In our opinion, initially the Corporation will have to depend largely on an annual grant-in-aid from the Government. Both the wings will also raise sufficient resources operating the various profit-making channels other than one or two channels which will be reserved for Public Service Broadcasting.

4.5 There is tremendous scope for extending the use of television in our country and we feel that so far the potential of television has not been fully exploited. There is scope for running channels exclusively for education, agriculture, public health And sanitation, weather etc. The resources of TV needs to be exploited in promoting literacy campaign and also promoting population control. These are areas where the potential of television has not been exploited. We are only scratching the surface. We recommend that other than channels made for the Public Service Broadcasting, Doordarshan and Akashvani should have the freedom to operate as many channels as they like and raise commercial revenue and advertising revenue to the extent possible. As and when, percentage of revenue goes up, the percentage of grant-in-aid will gradually come down. However, we should take care that in the race for garnering advertising and commercial revenue, these organisations do not go so far as to become dependent on the sources of such revenue, viz. Industry and Commerce. That again will militate against the very concept of true autonomy in another way. We have recommended the levying of an application fee and an annual licence fee for Satellite TV add Radio Channels and for terrestrial and for local TV and Radio stations. We feel that in course of time. that will bring in very sizeable volume of revenue. We also recommend that a B.R. licence fee abolished in the early eighties be revived. However, we recommend B.R. licence fee not for radio sets, but only for TV sets.

4.6 Licence of one and two band radio receivers was abolished with effect from 25th August, 1980. Subsequently, licence on all types of receivers including television receivers was abolished on 17th March, 1985. BRL fee is expensive to collect and it is also 1difficult to stern the revenue losses through evasion. Earlier the P&T Department was entrusted with the task of collection and anti-piracy activity. The Department was understandably ineffective in the latter area of activity, as the Inspectors did not have the power for search or confiscation.

4.7 It is estimated that, at present, there are 110 million radio receivers and 52 million television receivers, both colour and Black & White. We would recommend an annual licence fee of Rs. 500 on a Colour TV and Rs. 200 on Black and White. These should be collected through the Commercial Banks. We need not go back to, the old arrangement where post offices were used to collect the same. The Group also considered a suggestion that instead of the annual licence fee for each TV, a one time fee should be levied on each television set at the time of purchase. This also has some advantages. If this is accepted in place of the other alternative, we would recommend a one time fee of Rs. 1,000 for colour television and Rs. 500 for Black & White television. In our opinion, considering the huge amounts involved in installation of transmitting facilities and preparing adequate software for transmission to various homes, the public should not grudge having to pay a small amount of licence fee. We feel that, they will gladly do so.

4.8 We are told that FM RDS paging has yielded Rs. 6 crores revenue during 1995-96. This value-added service is now available at 17 places where AIR's FM stations are located. During the second phase, 16 more centres will have the facility boosting the revenue from AIR's paging service further.

4.9 Doordarshan as well as AIR should strive to exploit the assets and generate income from its programmes including archival material. Prasar Bharati should evolve a more aggressive strategy for the sale of material, facilities, services and expertise at home and abroad. For, we envisage heavy capital investment as Prasar Bharati enters the 21st century. The Corporation will have to take advantage of several, technological opportunities which the next decade will bring and raise sufficient resources internally.

4.10 The Group notes that the BBC has in recent years entered into several joint ventures to deal with specific, areas of broadcasting and business opportunities in an internationally competitive environment. In our opinion, both the wings of Prasar Bharati should be encouraged to enter into collaborations as joint venture with Broadcasting Organisations/industries for marketing their products or diversifying into newer, but allied activities or value-added services. These activities other than the commercial revenue, could be brought under one umbrella for marketing on the model of BBC Enterprise which can be another company operated within the Prasar Bharati.

Chapter 1
Chapter 2
Chapter 3
Chapter 5
Chapter 6
Chapter 7
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