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Prasar Bharti goes BBC way, TV prices up

Prasar Bharti goes BBC way, TV prices up

Author | Source: The Economic Times | Thursday, May 18,2006 6:49 AM

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Prasar Bharti goes BBC way, TV prices up

You may have to pay more for a TV set. The government plans to levy a licence fee on each TV set at the manufacturing stage to boost the financial health of public broadcaster Prasar Bharti.

A similar policy is practised in the UK, which helps its public broadcaster BBC to run a wide range of popular public services.

“It is expected that a licence fee between 10% and 15% ad valorem will be charged at the point of purchase. A decision to this effect is expected by the Group of Ministers tomorrow,” a source said.

The government plans to levy a licence fee on each TV set at the manufacturing stage to boost the financial health of public broadcaster Prasar Bharti.

It is believed that the proposal has been mooted by Prasar Bharati's committee on capital and financial restructuring.

Once the GoM gives a green signal, the proposal would be put before the Cabinet for approval, sources said. However, no time frame has been set to implement the proposal. The government provides an annual grant-in-aid to Prasar Bharti to fund its projects. The proposed one-time licence fee on TV sets is not new.

It had been practised in the country earlier and used to cover both radio and TV sets, experts said. The practice of a one-time licence fee in the UK has also been criticised.

Experts have opined the licence fee will have an adverse impact on sales of TV sets - estimated at Rs 7,600 crore in value terms where it is estimated that about one crore TV sets are sold in the country. In terms of value, TV sales are estimated. The industry has been growing at 8% annually.

Defenders of the proposal believe that the licence fee will go a long way in wiping off Prasar Bharati's revenue deficit, which is estimated at Rs 3,734 crore.

They argue that the broadcaster is providing a public service and therefore a part of the financial burden should be shared by the industry. The government is also planning to infuse Rs 500 crore in the share capital of Prasar Bharati.

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