MEDIA-INDIA: Foreign Investment to Help Small Newspapers

By Ranjit Devraj Reprint | | Print |

Ranjit Devraj

NEW DELHI, Jun 26 2002 (IPS) - A just-announced government decision to allow foreign direct investment (FDI) in India’s print media may help smaller newspapers, which have been groaning to get a toe-hold in an industry monopolised for half-a-century by a handful of big newspapers.

Predictably, the big newspapers are gearing up to oppose Tuesday’s announcement by Union Minister for Information and Broadcasting Sushma Swaraj of a Cabinet decision to allow 26 percent FDI in print media.

They are using the tired argument that foreign control over the print media, even if partial, would compromise India’s national security.

The newspaper barons have an unlikely ally in the Communist parties of the Left Front that warn of the replacement of the present monopoly control over the print media by transnational corporations that would ‘’stifle public opinion and weaken the democratic polity of the country”.

‘’It is pertinent to note that the United States and many western countries are not allowing FDI in their print media considering its adverse implications,” the powerful communist Party of India — Marxist (CPI-M) said in a statement Wednesday.

The CPI-M statement accused the right-wing Bharatiya Janata Party-led government of Prime Minister Atal Bihari Vajpayee of ‘’surrendering under the pressure of multinationals and their strong advocates in the union Cabinet, particularly Information and Broadcasting minister Sushma Swaraj and section of the BJP leadership”.

But the glaring fact is that India’s large newspaper groups have for too long been hiding behind a Cabinet resolution passed in 1955, one that has doubtful binding value but which restricts participation in the newspaper business to Indian citizens. Meanwhile they have stifled the growth of smaller newspapers.

According to Narendra Mohan, a member of Parliament from the BJP, which prides itself on being nationalistic, the lifting of the 1955 ban will ‘’strengthen” the newspaper industry and allow smaller newspapers to access technology and funds now available only to the big time newspapers.

Mohan, owner of ‘Dainik Jagran’ (Daily Watch), a powerful Hindi language newspaper, said the argument that allowing foreign capital into print media would compromise security had no meaning at a time when even sensitive sectors like defence production have recently been opened to foreign capital.

‘’The decision may hit the monopoly of some big English newspapers but democracy will be served,” he said.

Mohan’s viewpoint was supported by one of India’s top economic editors, T N Ninan, who joined like-minded editors in issuing a statement that read: ‘’The print media has been losing out in growth and reach, as well as in advertising to the television industry, which has had no restriction on foreign ownership.”

The ‘Business Standard’, which Ninan edits, said the reason the ban was not lifted sooner was due to resistance from big media houses seeking to ‘’corner the Indian market for themselves under the garb of seeking to protect the nation state”.

So entrenched have India’s print media monopolies been that they remained undisturbed by the country’s 10-year-old economic liberalisation programme and the phenomenal growth of cable television and the Internet during that period.

Many of these newspapers have been accused of deliberately leading a trend in which development news became suppressed in favour of society events and items dealing with the interests of the elite and the consumer goods industry, which provided handsome advertisement revenues.

Editors that did not conform to the ‘’Fashion, Food and Fun” school of journalism rapidly found themselves out of a job, as did reporters who focused on uncomfortable subjects like citizens’ rights and the phenomenal growth of corruption, or tried presenting alternative viewpoints.

Various surveys of the newspaper industry have shown an ever-widening gap between the large newspapers, whose circulation figures have been steadily rising, and the smaller ones that are scrounging for funds to improve distribution, news gathering operations and improve editorial skills and training before finally collapsing altogether.

Swaraj’s announcement was clear that not only was FDI restricted to 26 percent, but that all investment would have to be cleared by her ministry and that three-fourths of the board of directors would have to comprise of resident Indians. Editorial control would have to remain strictly Indian.

But these conditions have not satisfied either the big newspapers or the Left-wing parties. Said Prabash Joshi, editor of the ‘Jansatta’, a major Hindi-language newspaper: ‘’Allowing in even 26 percent foreign equity is like the story of the Arab and the camelà. before long the newspapers will be controlled by foreigners.”

Few would hazard a guess on whether foreign investors would actually come rushing in on the offer of minority stakes in concerns that have doubtful profitability. But Ninan said the ‘Business Standard’ was planning a tie-up with the London-based daily ‘Financial Times’. ‘’We already syndicate articles from Financial Times,” he said.

Similarly, the ‘Financial Express’, which is part of the Indian Express group, has been using financial content from the ‘Wall Street Journal’ with no equity participation because of the restrictive laws that have just been lifted.

Potential investors would almost certainly prefer to wait until a better political picture emerges given that several parties, including the powerful Congress party, have said they would oppose the government’s unexpected move in Parliament. There has been dissent even within ruling party ranks.

Said Yechuri of the CPI-M: ‘’Our real fight will be in Parliament where we will expose this government for ignoring the recommendations of a parliamentary standing committee on the issue.” The committee had overwhelmingly rejected FDI in the print media in March.

According to newspaper reports, Finance Minister Yashwant Sinha, who has been pushing the privatisation of government-owned enterprises and has been liberal with tax concessions for foreign institutional investors, has been one of the more strident opponents of FDI in print media.

The parliamentary report indicates that six newspaper groups were opposed to FDI in print: The ‘Times of India’ group, ‘Hindustan Times’ group as also the ‘The Hindu’, ‘Eenadu’ and the Malayala Manorama group.

India publishes an estimated 40,000 newspapers and periodicals, 15 percent of which are in English but reach the ‘’people who matter”.

Said Prabhu Chawla, the blunt-mannered editor of the ‘India Today’, India’s largest circulated news weekly: ‘’Ultimately, it would be the consumers and small and regional newspapers which would benefit from this measure, because they will be getting the money and technology that has been denied to them so far.”

MEDIA-INDIA: Foreign Investment to Help Small Newspapers

By Ranjit Devraj Reprint | | Print |

Ranjit Devraj

NEW DELHI, Jun 26 2002 (IPS) - A just-announced government decision to allow foreign direct investment (FDI) in India’s print media may help smaller newspapers, which have been groaning to get a toe-hold in an industry monopolised for half-a-century by a handful of big newspapers.
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