NEW DELHI: Prasar Bharati is striving to bridge the gap between its annual expenditure and revenue amid government pressures to lean less on it for financial support.

While the government has made it clear that it will only fund the capex requirements and expenses towards salaries, the pubcaster has settled on an operational expenditure capped at Rs 20 billion for the fiscal while its income hovers in the region of Rs 16 billion as it competes against private television and radio broadcasters.

So how does Prasar Bharati cut its financial coat to match the cloth that it has? The pubcaster, which has to look after Doordarshan and All India Radio (AIR), is banking on generating additional revenue of Rs 4 billion with aggressive marketing to promote its clutch of channels and radio stations.

The government had last month approved the financial restructuring of Prasar Bharati, stating that from this year the public broadcaster would have to ensure its operating expenses, other than salaries, are met from revenue earnings. The government had agreed to meet all the expenses of Prasar Bharati towards salary and salary-related expenses from its non-plan account for five years from 2012-13 to 2016-17.

Says Prasar Bharati CEO Jawhar Sircar, "After the Union Cabinet decision, Prasar Bharati?s annual operational expenditure would be in the range of Rs 15 billion to 20 billion, whereas the annual revenue currently is around Rs 16 billion. Therefore, we need to generate additional revenue of Rs 3.5 billion to Rs 4 billion and that is where our renewed emphasis on marketing is important."

Prasar Bharati has decided on an aggressive marketing policy to promote the advertisement revenue and viewership/listenership of Doordarshan and AIR that is expected to bring in an additional Rs 4 billion every year.

Rejuvenated by the recent Cabinet decision providing the pubcaster financial relief of Rs 120 billion after the recommendations of a Group of Ministers, Doordarshan and AIR have decided that marketing and revenue would be their two thrust areas. Prasar Bharati has also put special emphasis on different revenue streams and innovative methods for garnering additional income.

With the Cabinet also approving the transfer of numerous properties and infrastructure across the country - radio stations, television kendras, transmitters - to Prasar Bharati, the pubcaster has decided to leverage these new assets to earn more money.

The Prasar Bharati board, thus, unanimously approved Sircar?s proposal to hire professional marketing executives at market salary levels in order to help the public broadcaster come up with innovative revenue generation plans.

Prasar Bharati board unanimously passed a special resolution to thank Information and Broadcasing Minister Ambika Soni and Finance Minister P Chidambaram for the waiver of Rs 120.71 billion of loans, interest thereon and satellite charges that had accumulated over the years.

The waiver will help Prasar Bharati to pay greater attention to other areas of concern, including the free to air direct-to-home DD Direct Plus, technology (including new media), and its priceless archival treasures, according to Prasar Bharati officials.

New Delhi: The government on Friday gave its approval to financial restructuring of Prasar Bharati, whereby the public broadcaster will from this year have to ensure its operating expenses other than salaries are met from revenue earnings.

The government will meet all the expenses of Prasar Bharati towards salary and salary-related expenses from its non-plan account for five years from 2012-13 to 2016-17.

These measures were a part of the proposal of the Information and Broadcasting (I&B) Ministry on financial restructuring of Prasar Bharati. The proposal was based on the recommendations of the Group of Ministers (GoM) on Prasar Bharati constituted under the chairmanship of the Home Minister, to examine various issues pertaining to the functioning of Prasar Bharati. The recommendations were given over a year earlier.
 
The government will waive accumulated interest on loan-in-perpetuity, interest on capital loan and penal interest thereon. Loan-in-perpetuity and capital loans provided to Prasar Bharati will be converted into grants-in-aid.

From now on, any plan capital support by the government to Prasar Bharati will be in the form of grants-in-aid and not in the form of loans.

The government has also agreed to waive accumulated arrears pertaining to spectrum charges up to 31 March 2011 amounting to Rs 13.49 billion.

The property and assets will be transferred at book value to Prasar Bharati according to the provisions of Section 16(a) of the Prasar Bharati Act 1990. Normal accounting principles will be followed to determine their future value.

The Director General of Audit, Central Revenues (DGACR) will continue to be the nodal auditor of Prasar Bharati and will be assisted by qualified commercial audit staff for the audit of the annual accounts.

Prasar Bharati has been grappling with financial and human resource/employee issues since its inception, which has adversely affected its functioning as an autonomous organisation. In view of the problems being faced by the public broadcaster, the GoM was constituted on 7 March 2006. The GoM was again reconstituted on 21 February 2011 which considered Prasar Bharati‘s future revenue earning potential given its public service broadcasting mandate, and made a number of recommendations for making it financially viable and sustainable.

NEW DELHI: Prasar Bharati has appealed with the Service Tax Department Tribunal (CESTAT) for recovery of Rs 1.6028 billion deposited because of a ?gross calculation error?.

Prasar Bharati sources told indiantelevision.com that the pubcaster had claimed that the demand raised was erroneous, but the Service Tax office had issued a final demand notice on 5 May last year which included a demand of Rs 871 million issued to it in May 2009, with interest and penalty under Section 78. This led to the pubcaster depositing the sum of Rs 1.6028 billion.

A demand notice had been received in May 2009 from the Service Tax Department in respect of service tax liabilities relating to the years 2003-2007-08. This ha stated an unpaid amount of Rs 871 million.

The Member (Finance) A K Jain had in 2011 pointed out this gross error in a letter to Information and Broadcasting Minister Ambika Soni.

The sources said due to systemic deficiencies within the organisation prior to 2007-08, regular returns in respect of Service Tax collected were not being filed. As a result, the Service Tax Department raised the demand based on income and expenditure figures in the published accounts without taking into account the benefit of Cenvat Credit admissible to the pubcaster, which was not claimed due to these deficiencies.

Non-receipt of data from field offices and deficiencies in collection of accurate data have been identified as the main reasons for the flaw. The problem was compounded by lack of trained accounts staff and the pubcaster has now appointed a chartered accountants firm.

Returns are now being filed regularly, and the pubcaster has paid a sum of over Rs 4 billion (Rs 4,653,297,477) including about Rs 500 million (Rs 499,011,611) in CENVAT and the rest in cash for the years 2008 to 2012.

NEW INDIA: Arbitration proceedings by British production house SIS Live for recovery of amounts withheld by Prasar Bharati for breach of the contractual provisions relating to coverage of the Commonwealth Games in 2010 are still continuing.

Prasar Bharati had encashed the bank guarantee amounting to Rs 246 million and withheld a sum of Rs 70.80 million against services provided for Rights Holding Broadcasters.

Prasar Bharati has also withheld a sum of Rs 984 million (40 per cent of the contract value of the contract awarded to SIS Live for Rs 2.46 billion) on account of various disputes.

Information and Broadcasting Ministry sources told indiantelevision.com that the arbitral proceedings are still going on. The arbitration has been invoked by SIS Live under clause 8.2 of the contract with Prasar Bharati.

SIS Live had recently expressed relief recently at the reported move by the Central Bureau of Investigation to seek closure of the investigation against award to it of coverage of the Commonwealth Games.

The High Level V K Shunglu Committee had concluded that SIS Live that were estimated at below Rs One billion, but Prasar Bharati had already paid Rs 1.476 billion up to October 2010.

Interestingly even as the CBI had begun its investigation, the Central Vigilance Officer of Prasar Bharati had also commenced investigations. Following an objection by CBI that these would interfere with the investigating agency?s work, the Ministry directed the CVO to stop investigation on all sixteen issues listed by the Shunglu Committee except one which related to customisation of services, on which the CVO has already submitted a report.

The Ministry had in March last year cleared action in the matter of irregularities of award of contract to SIS Live by then Prasar Bharati Chief Executive Officer Baljit Singh Lalli (who was later suspended on corruption charges in other cases).

It had been stated that the award of broadcasting rights of Commonwealth Games reportedly resulting in loss of Rs 1.35 million. The Shunglu Committee in its report said ?undue benefits? were provided to SIS Live and Zoom Communications.

Lalli along with former Doordarshan Director-General Aruna Sharma were named by the V K Shunglu Committee in the first of its reports to the Commonwealth Games held in the Capital in October 2010.

No sanction was given for prosecution of Sharma in view of an explanation given by her earlier and another detailed note sought from her by the Ministry. It is learnt that she has been asked to submit the note within one week. Sharma had later been reverted to her home state Madhya Pradesh following completion of her term in Doordarshan.