The government is considering a proposal to relax the foreign direct investment limit in its direct-to-home (DTH) policy from the existing 20 per cent to 49 per cent, while capping the voting rights of the foreign partner at 20 per cent.
It is also looking at raising the existing 20 per cent limit on investment by a media company in a DTH venture to 49 per cent, again capping the voting rights of the media firm at 20 per cent. This is being done to hike the fund-raising capacity of DTH ventures, while retaining the control with Indians.
The proposal was forwarded by the ministry of information and broadcasting to the law ministry for its advice. The government is also likely to relax the DTH policy by waiving the entry-fee and bank guarantee clauses, and scale down the 10 per cent revenue-sharing arrangement.
The move by the government comes at a time when the much publicised DTH policy, announced in November 2000, failed to attract broadcasting companies.
Companies like Star TV had asked the government to make these changes. According to sources, Start TV had made a number of representations with the Planing Commission and the ministry of information and broadcasting for changes in the policy.
The 10th five-year Plan working group of the Planning Commission had also asked the government to review its DTH policy.