STATUS QUOIST: Chatterjee

Before Independence, most of the English dailies of the country were not only supporters of the foreign masters but also owned by them. The ownership changed hands with the lowering of the Union Jack. Now their Indian owners are the fiercest advocates of Jawaharlal Nehru's 1955 policy of ban on foreign direct investment (FDI) in the print media. On the other hand, the major players in the vernacular press and most new entrants in the business will be only too happy to be allowed to receive foreign partners.

The conflict is old and so are the parties. However, it took an unexpected political turn on February 26 when it became the subject for voting at the Standing Committee of Parliament on Information Technology, headed by CPI(M)'s Somnath Chatterjee. When it came up for voting, 26 of the committee's 45 members were present and 16 supported the view that the ban on FDI in the print media should continue. It was a victory of the entrenched English daily Press that had feverishly lobbied to get the committee's verdict in its favour, and so defeat competition even before it acquires an identity.

MEDIA

PLAYING POLITICS > On January 8, the parliamentary standing committee headed by Chatterjee rejects by vote the draft continuing with the ban on FDI and instead proposes a new one allowing foreign investment up to 26 per cent. > When it meets again on February 26, despite protests from members Chatterjee inexplicably takes up the old draft that had been voted out. > He ignores written submissions and even proposed amendments to the old draft and puts it to vote. The draft is adopted by a 16-10 vote. Members accuse him of ramming through his own political agenda.

The defeat of the FDI proposal is curious. When the committee met on January 8, eight of the 15 members present voted in favour of 26 per cent foreign investment in the print media, on the condition that editorial control remains in Indian hands. But if within two months the committee rejected its own proposal, it was largely because of the 180-degree turn taken by the Congress members on the issue.

In the three rounds of meeting that the group of editors and publishers in favour of FDI held with Congress President Sonia Gandhi, she seemed amenable to opening up the print media. BJP Rajya Sabha member Narendra Mohan, who owns the widely circulated Jagaran Group of Hindi newspapers and is a prominent pro-FDI member of the standing committee, says, "Sonia told us that if foreign equity was already there in electronic media, there was no harm in opening up the print media."

In their second meeting, Sonia asked the editors to speak to Congress Working Committee member Arjun Singh who had reservations about FDI in print media. For Congress support, Singh set a condition: management and control of the media were to be in Indian hands. A Congress committee, headed by Pranab Mukherjee and comprising Arjun Singh, Manmohan Singh, K. Natwar Singh and Shivraj Patil, met twice to discuss the issue. There was unanimity in the panel. Sonia even told Mohan how her party was "all for it".

"Chatterjee wilfully violated the parliamentary norm." NARENDRA MOHAN: BJP MP and committee member

At the January 8 meeting, the Congress kept its word. Among the 12 members who disapproved of the draft report that disallowed FDI was Congress member Pawan Bansal. As desired by the majority of the members, the Standing Committee Secretariat was advised to put up a revised draft approving FDI of up to 26 per cent. The members also decided to meet on the second day of the budget session to consider and adopt the revised draft.

On February 26, a different drama unfolded. "Chatterjee just picked up the earlier draft and thumped it on the desk announcing 'let us take up this draft'," Mohan recalls. Then to the surprise of Mohan and others, the 10 Congress members voted to prevent FDI in print media. The Samajwadi Party too did a volte face. Its leader Amar Singh had earlier sent a letter to the committee that his party was pro-FDI, but when the vote was taken the sp members sided with the Congress. The about turn could well have something to do with the Uttar Pradesh assembly election results that has seen most major parties suddenly turn ambivalent on sensitive issues. "Senior leaders wanted to tread cautiously on the issue," Bansal offers as an explanation.

MEDIA

THE CONGRESS FLIP-FLOP > In the three meetings that pro-FDI publishers had with Congress President Sonia Gandhi, she favoured opening up the industry. > After a consensus among senior Congress leaders, on January 8 its members in the committee call for allowing up to 26 per cent FDI with media control in Indian hands. > But on February 26, the Congress members in the committee dramatically reverse their stand and vote against FDI in print media.

Pro-FDI members are livid with the way Chatterjee conducted the proceedings and accuse him of bias. Normally once issues are conclusively settled at a parliamentary standing committee, it is not changed. Says Mohan: "Somnath just rammed the issue through. Written submissions of all those members who were not present were not even considered or read. The so-called adopted report was not discussed clause by clause. Amendments proposed in the old report were not even considered."

The CPI(M) leader refuses to "discuss standing committee proceedings". He maintains that all contentious issues had been thrashed out in a two-hour discussion. "Why should so much importance be given to standing committee reports? The Government is not bound by our recommendations. It can go ahead and do whatever it wants," says Chatterjee. The FDI supporters have now written to Prime Minister A.B. Vajpayee and Information and Broadcasting Minister Sushma Swaraj not to entertain the committee's recommendations. They have also requested Lok Sabha Speaker G.M.C. Balayogi to disallow the report from being tabled.

The debate over FDI is as fierce as the stake is large. India has one of the biggest communications industries in Asia, with 6,830 English and 39,825 vernacular publications in the country. With a cumulative circulation in excess of 120 million, the Indian print media ranks fifth in the world. Entrenched media groups like The Times of India, Hindustan Times, The Hindu and Malayala Manorama, supported by some politicians, have used this as an argument to say that the opening up of print media would threaten India's security and allow foreign countries to influence public opinion.

However, there is a large group of media houses that support FDI, including Business Standard, The Indian Express, The Asian Age, The Pioneer, The Deccan Chronicle, Business India, Mid-Day, Dainik Jagaran, Gujarat Samachar, India Today, Ananda Bazar Patrika, Rashtriya Sahara, and many regional publications. The argument that the print media alone needs protection, they say, is specious. The country has 70 million television households, half of which have cable and satellite connections. TV channels broadcasting foreign programmes have viewership incomparably larger than newspaper readership. In urban areas, the TV concentration matches the reach of newspapers. FDI is permitted up to a limit in the electronic media, and the cap may be raised considerably as the Convergence Bill becomes a law.

In newspaper business, where the larger share of the revenue comes from advertising and not sales, advertisers reward the newspaper that enters the largest number of homes and commands the maximum number of eyeballs. Entrenched newspapers thus get the volumes as they drop prices, at a very high cost though. The gains from advertisement comes much later, after the price war has burnt holes in the management's pockets. On the other hand, the leaner late-entrants can slog on to improve their products but they lack the resources to offer price incentives to the reader. FDI is regarded as a source of capital that can set right the built-in imbalance between the old players and the new.

The political class has been squeamish in tackling such an issue because of the entrenched media's clout. Ironically, Andhra Pradesh Chief Minister N. Chandrababu Naidu's Telugu Desam Party has been strongly opposing FDI, though Naidu himself has been globe-trotting for the past three years in search of investments for his state. BJP Rajya Sabha member Balbir Punj says, "The standing committee's decision is a retrograde step. At a time when there is virtually no control on the electronic media, why should the print media be discriminated against?" This is a question that the Government will find increasingly difficult to answer in the coming months.