The recent amendments to Fema rules and the Andhra Pradesh High Court decision to strike down the rule that bans political advertisements on television, opens the doors of foreign television companies (FTCs, that uplink from outside the country) to political parties who wish to advertise.
The Congress, BJP, SJP and even regional parties, who wish to reach a national audience but could not do so due to a Fema restriction on remittances for advertisements, can now advertise on entertainment channels like Sony, Discovery and a couple of channels from the Zee and Star bouquet that continue to be uplinked from Singapore and Hong Kong respectively.
Earlier, only exporters whose export earnings was more than Rs 10 lakh for two preceding years were allowed to advertise on these channels as the beam goes to countries which could be their export destinations. Exporters whose earnings were less than this had to seek approval of the Reserve Bank of India. But with these channels grabbing a large chunk of viewership in India, even non-exporters started advertising on these channels by illegally buying the exporters' entitlement to forex at a premium.
Last month, the government simplified procedures and amended the Foreign Exchange (Compounding Proceedings) Rules, 2000. Now, remittances for advertisement on FTCs have been allowed without any ceiling. As a result non-exporters too can advertise. Coming on the eve of the elections, this amendment will definitely benefit political parties.
STAR India Pvt Ltd COO Samir Nair says: "When the market opens up, many benefit by default. Anyway the benefit accrues not with the ability to advertise, but with the desire to do so. How do you know that political parties will not choose to go to Doordarshan which also has a wide reach.
Prasar Bharati CEO K S Sarma says he would rather wait for the Election Commission to take a view. In any case politicians too are still watching as the EC ban is yet to be lifted, he points out. Sony's Kunal Dasgupta and Zee's Jawahar Goel say it is too early to comment as there have been no enquiries as yet.
Sahara TV president Mahesh Prasad believes that it is the news channels that political parties target. Company's head (Sales) Monika Srivastav says all parties have been in touch since noon Tuesday to book ads. "I expect that the broadcasting sector will get revenues worth Rs 50-60 crore from political advertising now," she said.
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