With the economic downturn threatening to turn into a full-blown recession and with the finance minister reduced to going around the world with a hat in hand, the Congress-led UPA government last week increased foreign direct investment (FDI) in telecom, defence, petroleum refining, etc, but…
But, not the media.
On the issue of enhancing FDI in media from 26% to 49% under the automatic route as proposed by a finance ministry panel, two separate ministries swung into action. First, the ministry of information and broadcasting sought the views of the telecom regulatory authority (TRAI) and the press council (PCI).
And then, the home ministry opposed the hike, favouring control of media houses by Indians. The Press Trust of India (PTI) quoted official sources as saying:
# “Opening up of current affairs TV channels, newspapers and periodicals dealing with news and current affairs may lead to meddling in India’s domestic affairs and politics.
# “Increase of FDI in broadcasting and print media may also allow foreign players to launch propaganda campaign during any national crisis as well as when interests of any particular country is harmed through any government decision.
# “Big foreign media players with vested interests may try to fuel fire during internal or external disturbances and also can encourage political instability in the country through their publications or broadcasting outlets.”
These reasons have been touted for 22 years now and will surprise nobody. Last week, The Hindu (which was initially at the forefront of the opposition to FDI hikes in media) reported that the industry was divided on the FDI issue:
“While certain big networks like Times Television Network, Network 18 and NDTV are broadly supportive, others like India TV, Sun, Eenadu and Malayala Manorama group have objected to an increase in FDI caps.”
The Centre’s decision to not go-ahead with FDI in media in an election year will not surprise anybody. After all, it wouldn’t want to rub promoters and proprietors on the wrong side, especially when powerful corporates (potential election donors) have substantial stakes in the media.
Still, the question remains whether the media can be given this preferential treatment and, if so, for how long? Will the home ministry’s fears ever vanish? Or, will the media which talks of competition and choice as the great leveller in every sphere of life, seek the protection of politicians in power to protect its turf?
Also read: India opens another door for FDI in papers, mags
In fact, there is no rational for not having FDI in any sector other than paranoia! Well,except may be perhaps Defense, but then it assumes all Indian entrepreneurs are patriotic and won’t let down the country.
What is needed is appropriate regulation and control to ensure a domestic or foreign player can’t undermine India’s security in crunch time. Aviation, Telecom, Defense can all have 100% FDI, under good regulators and well defined contracting policies.
WHy should news be any diff?
FDI cap must be enhanced, as this will create a level playing field in the media. People are now getting their news from forign on media, basically through Internet and satellite TV, so it makes no sense to stop FDI in indian media.
The FDI might be helpful in breaking the stranglehold on Indian media that few elite and politically connected families are currently enjoying.