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FDI in print: It's all about money, honey!

On 25 June 2002, the Union Cabinet took a small but momentous step towards ending the appalling hypocrisy that has dictated the debate over foreign direct investment in the print media.

However, the decision to permit 26 per cent FDI comes with several conditions aimed at preventing 'national interest' from being compromised by foreign investment.

'National interest,' is the euphemism of a few large newspaper groups for their own vested interest. They have carved out geographical monopolies across the country at the cost of smaller newspapers and would like this cosy situation to continue.

Over the decades, this powerful group has grown bigger and stronger by holding up a dubious 1955 Cabinet resolution to oppose FDI in the print media.

This continued even as India embarked on its liberalisation programme and dismantled various monopolies over the last decade. Even in the media business, we permit 100 per cent foreign ownership over television companies (Star, Zee and Sony all have substantial foreign investment) and have foreign news, views and information accessible to anyone who logs on to the Internet.

The protests and objections have nothing to do with national interest. In fact, it is all about money, honey! That is the bottomline.

So long as a discriminatory ban on FDI in print denied smaller newspapers access to capital, it allowed the large newspaper monopolies to grow unchecked. Those opposed to even minority FDI in print are aware of this fact.

They know that newspapers that are opposing FDI are not the ones who take the lead in upholding citizens' rights, exposing corruption and exploitation in society, or providing alternative viewpoints.

They include newspaper groups that have annihilated editorial freedom, converted newspapers into consumer products and believe that readers have to be lured into reading the news by peppering their reports with titillating pin-ups and risqué headlines. They would have us believe that the number of Page 3 events a person is invited to is a measure of success.

These are the very same newspapers which wrote trenchant editorials on the need for liberalisation, openness and a level playing field in every other business, including traditional public sector domains such as defence supplies, telecom and mines.

But when it came to FDI in the print media, they were worse than the most recalcitrant politician unwilling to give up a public sector fief.

For them, the bogey of compromising national interest made for good political rhetoric; it also went down well with readers who sincerely believe that editorial content is dictated by national concerns rather than grubby money.

But money is indeed the name of the game for committed newspapers that are struggling to compete with print monopolies and the growing dominance of television and the Net.

They need money to improve distribution and circulation; they need money for effective marketing and advertising and they need money for newsgathering and research. They could also do with help in improving editorial skills and training. Without access to funds, the gap between the major media monopolies and smaller editorial-driven newspapers is increasing everyday.

Large and profitable newspapers have the ability to drop the cover price of their publications to increase circulation - this, in turn, attracts the advertising bucks and makes them more powerful.

But surely, it is not in the interest of civil society to help newspaper managements who treat all news as one long Page 3 party.

Yet, contrast the bold dismantling of other business monopolies with the gingerly treatment of FDI.

• First, FDI is restricted to a mere 26 per cent even though other, more powerful media have much higher access to foreign capital.
• Second, the government has stipulated that another Indian investor would have to hold a 'significantly' larger stake in the company. The definition of what constitutes 'significant' could always be used to delay permissions and to interfere.
• Third, foreign investment will have to be cleared on a case-by-case basis by the information & broadcasting ministry.
• Every change in shareholding pattern will also have to be cleared by the ministry.
• Three-fourths of the board of directors will comprise resident Indians; and editorial control would always have to vest with an Indian.

All these restrictions are not only aimed at appeasing the Opposition, but also to ensure that the government retains the power to meddle with Indian newspapers.

Despite these constraints, serious journalists who support FDI in print have greeted the decision with jubilation. They believe that with a foot in the door they would be in a better position to lobby for further relaxation.

Let's look at the specious grounds on which FDI in print media was blocked for so many years.

Newspapers opposed to it claim that the print media occupies a special place in the political, cultural and intellectual life of the country. It makes you wonder whether the Page 3 goings-on, which have begun to cannibalise editorial pages and encroach on the front page, add to the intellectual or cultural content of ordinary readers.

Moreover, when the best articles and columns in these newspapers are usually picked up from a variety of leading international publications such as The Economist, Business Week, Forbes and The New York Times, one wonders what the fuss is all about.

Without even going into such duplicitous arguments, let is simply ask ourselves what is our primary source of news today. Isn't it television or the Internet? Whether one is seeking information on the Gujarat riots or the drumbeats of a threatened war with Pakistan, whether one wants to savour the football fever around the world or follow the fortunes of Lagaan at the Oscars - our first access point is no longer the newspaper, but the television or the Internet.

Both are media with free access to FDI and have no restrictions on editorial freedom and compete with the cash-starved print media for advertising.

Newspapers, on the other hand, are forced to look beyond the visuals and the short sound bites. They provide in-depth comment and analysis. Surely, newspaper groups that have a strict 500-word limit on news reports, which in turn are accommodated in the space between advertisements, cannot claim to provide that in-depth analyses.

In response to an earlier piece on NDTV's exit from the Star TV bouquet, many readers wrote to ask who were the main opponents of FDI in the print medium.

I have since obtained the Standing Committee on Information Technology's report on 'Entry of foreign print media and foreign direct investment in print media,' which was presented to the Lok Sabha on March 22 this year and rejected even minority FDI in print.

The report of this committee is an eye-opener. It was chaired by senior politician Somnath Chatterjee of the CPI(M) and comprised 38 members.

As usual, at least a quarter of them rarely attended the meetings and made no significant contribution to the proceedings. Of the rest, there were a stunning 10 dissent notes to the report.

The introduction to the report indicates that many of the dissenters questioned 'the manner in which the proceedings were conducted.' This forced the chairman to seek permission from the Deputy Speaker of the Lok Sabha to expunge all those discussions that "cast aspersions on the committee" or were not "couched in temperate and decorous language."

Hence, the main body of the report does not refer to inconvenient discussions and even the dissent notes have several paragraphs blanked out from them. Yet, a leading daily would have us believe that there was wide spread opposition to FDI in the print media even in the Cabinet.

Ironically, the newspaper reports that Finance Minister Yashwant Sinha, who wants to privatise the public sector, and is liberal with his tax concessions for foreign institutional investors was among the most strident opponents of FDI in print.

The report itself indicates, that only six newspaper groups vehemently opposed FDI in print. They were: The Times of India group, Hindustan Times group, The Hindu, Eenadu and the Malayala Manorama group. Its supporters included, Indian Express, India Today, Pioneer, Ananda Bazar, Rashtriya Sahara, Mid-Day, Business Standard, Dainik Jagran, Mail Media, Reader's Digest, Business India, Magna Publications (Stardust, Savvy, et cetera), Bombay Samachar and Chitralekha.

As for the political opposition, it is scattered across various parties. The Left parties, as usual, remain opposed to all signs of liberalisation, development and foreign investment.

The Congress has also opposed the decision; but this only exposes its intellectual dishonesty again. This party has blown hot and cold on the issue and at one time had stalwarts such as Dr Manmohan Singh and N K P Salve supporting FDI in print.

Some fringe parties, swadeshi lobbies and interest groups have also criticised the decision. All these may still try to sabotage the move because the media houses that have opposed FDI are very powerful.

Hopefully, the last hurdle has been crossed and good sense will continue to prevail.

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