The Union Information and Broadcasting Ministry has decided to allow Foreign Institutional Investors (FIIs) pick up stakes in print media companies and television news channels provided the limit is within the existing 26 per cent ceiling on foreign investment in both the media.
A note to change the existing Foreign Direct Investment (FDI) guidelines in newspapers and television news channels to factor in the FIIs has been sent to the Cabinet for approval.
According to Ministry sources, the decision has been taken to bring in a degree of flexibility in the existing policy that was drawn up for the print media in 2002 and for the television news channels in 2003. "This will allow media establishments access international funds. Further, it dilutes foreign control as FIIs do not control stakes and cannot block special resolutions.''
The I&B Minister, Jaipal Reddy, said today that there was no proposal to raise the FDI cap in newspapers and television news channels. The issue had come in for considerable debate last month after the Union Home Minister, Shivraj Patil, – who heads the Group of Ministers on the print media – sought the view of the Left parties on the FDI ceiling. The Left parties made their opposition to any increase in the FDI cap clear to the Government during their discussions on the subject.
Since the ceiling will remain at 26 per cent, sources said the decision to allow FIIs to pick up stakes in the two media did not require a change in the law. "All that is needed is a change in guidelines, and that is what we have sent to the Cabinet.''
The print media was opened to foreign participation in June 2002 when the Bharatiya Janata Party-led National Democratic Alliance Government decided to depart from the Cabinet Resolution of 1955 which governed the medium till then. As per the decision, 26 per cent FDI was allowed in the news and current affairs publications. A little over a year later, the same Government framed guidelines for the television news channels seeking to uplink from India as per which they had to scale down the foreign equity to 26 per cent.
