The New Government and Indian Media: Agenda for Reform

I will begin by taking a cue from a catchphrase Mr. Modi used frequently in his stump speeches through the electioneering. “More Governance. Less Government.”

If PM Modi follows this through in all those facets of the government that media industries deal with, he will simultaneously:

• Strengthen plurality of voices and reinforce the media’s ‘Fourth Estate’ role as our democracy’s watchdog and first line of defence

• Unlock investment interest, domestic and FDI, and quickly create thousands of new jobs in the people-intensive creative content sector

• Give fillip to revenue growth for the centre and state governments

• Allow freer play of market forces to accelerate growth in the still nascent media sector

Let us look at specific examples of each of these:

• It is nearly two decades since FM radio was first opened up to private broadcasters. Even today, licence conditions prohibit radio broadcasters from news and current affairs. In a laughable concession they are, however, permitted to retransmit, without any editing or alteration, All India Radio news bulletins. In the meanwhile, television, which reaches a much larger slice of the population, has a whole, officially recognised and duly licensed ‘news’ genre. Apart from a visceral fear of real free speech in both the legislative and administrative arms of the government, there seems to be no justification for this position. The Supreme Court admitted a public interest litigation on 17 October 2013 seeking the abrogation of this restriction. Can the new government show us that its heart is in the right place when this matter next comes up for hearing?

• While restrictions on foreign investment in the news business are nearly universal for easily understood reasons, the government will soon be hearing petitions from several players in the electronic news media about the dire straits they are in. While clearly appreciating the need to ensure that a clear majority in a news business must remain in Indian hands, could the government not consider pushing up FDI to 49 per cent? Similarly, the related-party restrictions on investments in the cable & satellite distribution plant (DAS, DTH, HITS etc.) impede the path for many natural investors. Given the ambitious path laid out to analog sunset at the end of this year, the sector is crying out for more investment and the progress of the digitisation project to date is evidence enough for the consumer and content creator benefits it brings in its wake.

• A very important reason for mandatory digitisation is that it lays to rest the unregulated analogue cable plant, which from the beginning, has operated in a twilight zone beyond the reach of the state. An unfortunate outcome, for central and state governments, is that incomes and profits of businesses in this segment of the media industry have stayed in the informal, ‘black’ economy. Given turnovers in tens of thousands of crore, the loss to the exchequer over the last several years is evidently sizable. The future, however, looks better. Now if the government acts to open FDI pathways into the distribution plant, this future of big service and entertainment tax revenues might be even closer at hand.

• The Telecom Regulatory Authority of India (TRAI) was an accidental invitee to the television industry. Once it got in, though, it behaved like the well-known fable about the Arab and the Camel. On a cold night in the desert, the camel requests the Arab if it can only get its freezing nose into the tent. One thing leads to another and soon the camel is in the tent and the poor Arab is freezing out in the open. TRAI has chosen to build a complex framework to regulate tariffs between content providers and distribution platforms with all sorts of caps and restrictions. Interestingly enough, it appears that the regulations work only to protect distribution interests while doing little or nothing for the final consumer. With a multiplicity of content providers and distribution platforms, the likelihood of any player or group of players being able to exert monopolistic or even oligopolistic economic power leading to extortionate impositions on the consumer now appear far-fetched. Under the circumstances, it may be time to wind down this onerous framework. In any case, an erstwhile TRAI chairman Pradeep Baijal, had indicated that regulation would make way for forbearance soon as the last-mile was competitive. How much more competitive can it get with half a dozen DTH players, hundreds of DAS platforms and indications of other initiatives like HITS in the pipeline?

The country has given an unequivocal mandate to Mr. Modi, his party and coalition. Expectations are stratospheric and everything that accelerates the wheels of business and commerce should be music to his and his government’s ears. BBC’s stated mission “To enrich people's lives with programmes and services that inform, educate and entertain” is a great encapsulation of the mission of the entire media industry itself. Support this industry and you unleash a catalysing force of good, Mr. Modi.

Because ultimately, as the Clinton Campaign in 1992 put it pithily, it’s “The Economy, stupid.”

(These are purely personal views of Provocateur Advisory principal Paritosh Joshi and does not subscribe to these views)

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