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UPA Government's media policy sends confusing signals: INS

Special Correspondent

Print media opened up, but tendencies towards state control remain

BANGALORE: The Indian Newspaper Society (INS) said on Thursday that the media policy of the United Progressive Alliance (UPA) Government was "fluid," giving "confusing signals" over the last year.

INS president Pradeep Guha, in his address to the 66th annual general meeting of the society, said the Government had liberalised norms for the presence of foreign interest in the print media, while at the same time displaying 1960s-style tendencies towards state control.

"Regressive tendencies were particularly marked in the manner in which the Government sought to enlarge the role of the Directorate of Advertising and Visual Publicity (DAVP)," he said.

The Government's move to channel even commercial advertisements of autonomous bodies, banks and public sector enterprises through the DAVP would affect the revenues of the industry.

"This is a retrograde step in a policy environment being shaped to provide a level playing field for public and private sectors in all industries. At a time when the public sector is being allowed free access to the various markets, including finance and real estate, it is anomalous that it should claim a subsidy from the newspaper industry," he said. The society has decided not to extend DAVP rates to PSUs, autonomous bodies and banks.

Little help

Similarly, the Government's newsprint policy had not been of any particular help to the newspaper industry as the impact of newsprint prices on its financial health continued to cause concern. The Government has so far ignored the plea to exempt newsprint from customs duties given the fact that over 70 per cent of India's newsprint requirements were imported. To tide over the present crisis, the society had suggested that the Government permit the industry to import recycled and de-inked newsprint at the same rate of duty as virgin newsprint. This concession would take effect only from 2007.

The society had also pointed to the designers of the Value Added Tax regime the conceptual fallacy in exposing the industry to the new impost, but without success, he said.

Though, the newspaper industry benefited from the lowering of tariff barriers on the import of capital goods and consumables outlined in the 2005-06 Union Budget, the Government has shown little sensitivity to its unique needs.

The society has been unable to convince the Government that expenses such as travel, conveyance and hotels are neither a "fringe" expense for the industry nor a "benefit" for its employees. "These expenses are fundamental to the news gathering process and cannot therefore be subjected to the Fringe Benefit Tax", he noted.

Fiscal apathy

Considering that the large majority of newspaper establishments belong to the small and medium categories, the Government's fiscal apathy could lead to widespread financial distress in the industry, he added.

According to a study carried out by Pricewaterhouse Coopers, the long-term trend line showed the industry was growing at a rate of 6.9 per cent per year.

The estimate is based on historical patterns which may no longer be relevant.

Mr. Guha said the country's economic momentum had broken through the five per cent barrier and the economy was expected to grow at 7-8 eight per cent over the next couple of years.

Historical patterns suggest that the newspaper industry grew at about 1.5 times the GDP and hence it could grow at 11-12 per cent a year. Since a major portion of the growth came from advertising revenues, a 15 per cent growth in advertisement revenue over the next few years could be safely anticipated, he said.

Referring to competition from the electronic media, he said television and the press were now both mature media with their reach levels having crossed the "critical mass". The realignment of advertising budget between the two had already taken place on a substantial scale. He, however, said that the impending expansion of the FM radio could bring before the print media "unforeseeable challenges".

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