NEW DELHI: Even as a group of ministers (GoM) deliberate on a draft of the revised uplink norms, various arms of the government differ on the issue of quantum of foreign investment in news channels uplinking from India.
As opposed to the information and broadcasting ministry, the ministries of commerce and finance feel that limiting FII investment in news ventures within the overall foreign investment cap of 26 per cent would be “restrictive.”
Rather, the finance ministry, ideally, would like the total foreign direct investment level (including FII investments) to be higher at 49 per cent.
“It would be preferable to restrict foreign direct investment (FDI) to not exceeding 49 per cent in the Indian holding companies of the applicant (news) company,” ministry of finance has observed.
Harping on similar lines, the ministry of commerce feels that capping FDI and FII investments at 26 per cent might be detrimental to foreign investments being made in India.
Reacting to a set of revised uplink norms (for news channels), inked by the I&B ministry, the commerce ministry sates, “The draft Cabinet note proposes a composite limit (FDI and FII investments) of 26 per cent, which would make the policy more restrictive.”
The finance ministry, seized with the issue of increasing FDI inflow into India, has stated that it would be preferable “not to calculate” FDI pro rata in the equity of the Indian shareholding news companies.
However, the I&B ministry seems to be obsessed with the 26 per cent limit and has argued for FII investment to be allowed within the foreign investment cap.
“The proposal to include FII/non-resident Indian investment within the overall limit of 26 per cent would not make the policy more restrictive,” the I&B ministry has countered.
It has further stated that there has been no difficulty so far in
calculating FDI on a pro rate basis in shareholding companies.
It “may not be feasible to prescribe a uniform 49 per cent shareholding (across all sectors)” as those companies may be from different sectors of the economy having different sectoral ceiling on FDI, the I&B ministry has argued.
Interestingly, the finance ministry also feels that stipulating a news venture, uplinking from India, to have a minimum of 51 per cent shareholding from Indians may be detrimental too.
Some of the public media companies like TV Today (owners of Aaj Tak and Headlines Today news channels), Zee Telefilms and Television Eighteen Ltd (the majority joint venture partner in CNBC TV 18 business channel) have made representation to the government, included in the government note, that it would be difficult for listed companies to track FII investment on a day-to-day basis.
The GoM, which is supposed to be studying the uplink and downlink policies, is still to meet on the issue. Government sources said that the process may start after the present session of Parliament adjourns sine die on 25 August.
