Lower ad revenue, reduced grants push Prasar Bharati to Rs 573 crore FY25 deficit

Prasar Bharati, India's public service broadcaster that operates All India Radio and Doordarshan, swung into a deficit of Rs 572.53 crore in the financial year 2024-25, reversing a surplus of Rs 340 crore in the previous year, as both commercial revenue and government grants declined while expenditure remained elevated.

The deterioration of nearly Rs 913 crore in the broadcaster's financial position was driven by a 9.3% decline in total income, even as total expenditure increased marginally. The accounts also reveal a substantial build-up of legacy liabilities, including a contingent liability of Rs 4,981.07 crore towards late fees and interest on spectrum and space-segment charges.

Prasar Bharati's financial disclosures come against the backdrop of its continuing dependence on government support. The Ministry of Information & Broadcasting remains its largest source of funding, while the broadcaster's commercial revenue from AIR and Doordarshan declined sharply during the year.

Income falls to Rs 4,574 crore

Prasar Bharati's total income fell to Rs 4,573.72 crore in FY25 from Rs 5,043.60 crore in FY24, a decline of Rs 469.88 crore.

The largest decline came from sales and services, which include commercial revenue generated by All India Radio and Doordarshan as well as income from the broadcaster's DTH operations.

Income from sales and services fell to Rs 1,706.69 crore in FY25 from Rs 1,911.56 crore a year earlier.

Within this, commercial revenue from AIR and Doordarshan dropped to Rs 488.80 crore from Rs 641.65 crore, a decline of nearly 24%.

DTH income was comparatively resilient, declining to Rs 1,251.69 crore from Rs 1,285.04 crore.

Government grants and subsidies from the Ministry of Information & Broadcasting also declined during the year. Grants fell to Rs 2,476.32 crore from Rs 2,702.49 crore in FY24, a reduction of about Rs 226 crore.

Interest income declined to Rs 252.76 crore from Rs 285.51 crore, while other income, including receipts from broadcast towers and staff quarters and profit on the sale of assets, fell marginally to Rs 136.85 crore from Rs 143.07 crore.

The decline in grants is significant because government support remains central to Prasar Bharati's operations. The Receipt and Payment Account shows that the broadcaster received Rs 2,315.53 crore during FY25 towards salary support, Rs 212.25 crore under the Broadcast Infrastructure and Network Development scheme for creation of capital assets and Rs 50 crore as general grant-in-aid for content.

Expenditure rises despite revenue pressure

While income contracted, total expenditure increased to Rs 4,914.34 crore in FY25 from Rs 4,859.59 crore in the previous financial year.

Establishment expenditure remained the largest cost component at Rs 2,673.47 crore, although it was lower than Rs 2,775.08 crore in FY24.

The establishment-cost figure includes salaries and wages, pension and retirement-related benefits. Salaries and wages accounted for about Rs 2,429.89 crore during FY25, while expenditure on retirement, terminal benefits and pension stood at about Rs 133.36 crore.

The more significant increase came in programme-related spending.

Prasar Bharati spent Rs 941.53 crore on programmes during FY25, up from Rs 695.58 crore in FY24. The accounts attribute the increase primarily to higher expenditure on its digital/OTT platform and increased payments to artists and professionals.

Other administrative expenses declined to Rs 841.63 crore from Rs 885.43 crore, partly due to lower GST expenditure and reduced provisioning for doubtful debts.

Satellite and spectrum charges increased to Rs 166.91 crore from Rs 160.85 crore.

Interest expenditure also rose marginally to Rs 158.09 crore from Rs 154.85 crore, largely reflecting the burden associated with the broadcaster's long-standing capital loan from the Central government.

Depreciation declined to Rs 132.70 crore from Rs 187.80 crore.

Before prior-period adjustments, Prasar Bharati recorded an excess of expenditure over income of Rs 340.62 crore in FY25, compared with an operating surplus of Rs 184 crore in FY24.

Prior-period corrections deepen the loss

The final deficit was further affected by a net prior-period adjustment of Rs 231.91 crore.

A substantial part of the adjustment related to an advance of Rs 234.95 crore from debtors that had not been correctly accounted for as an opening balance as of April 1, 2024.

Schedule 27 of the accounts lists 26 categories of prior-period corrections covering financial years from FY2017 through FY2023-24.

The corrections include issues relating to non-reporting of interest income on current liability accounts, misclassification of ledger heads and understatement of fixed assets in earlier financial years.

The impact of the loss and adjustments was reflected in Prasar Bharati's corpus/capital fund, which fell to Rs 404.40 crore as of March 31, 2025, from Rs 811.99 crore a year earlier.

Current liabilities climb to Rs 5,640 crore

Prasar Bharati's balance sheet expanded marginally during FY25. Total assets and liabilities stood at Rs 6,990.14 crore as of March 31, 2025, compared with Rs 6,789.41 crore a year earlier.

The increase was primarily driven by current liabilities and provisions, which rose to Rs 5,639.97 crore from Rs 5,033.16 crore.

Interest accrued but unpaid on the corporation's capital loan stood at Rs 1,381.92 crore. Penal interest on overdue interest and principal stood at Rs 364.91 crore.

Provisions for spectrum and space-segment expenses increased to Rs 2,013.34 crore from Rs 1,913.70 crore.

Prasar Bharati's unsecured loans remained unchanged at Rs 933.39 crore. These comprise an unpaid capital loan of Rs 770.47 crore and an interest-free loan of Rs 162.92 crore extended in connection with the 2010 Commonwealth Games.

The liability has remained on the books amid a long-standing issue over its proposed conversion into grants.

On the assets side, Prasar Bharati's net fixed assets stood at Rs 1,129.06 crore, while capital work-in-progress was valued at Rs 486.35 crore. Current assets, loans and advances rose to Rs 5,374.74 crore from Rs 5,221.46 crore.

Spectrum-related contingent liability touches Rs 4,981 crore

One of the largest liabilities disclosed in the notes to the accounts relates to spectrum and space-segment charges.

As of March 31, 2025, Prasar Bharati reported a contingent liability of Rs 4,981.07 crore towards late fees and interest on spectrum and space-segment charges.

Other contingent liabilities were considerably smaller. These included Rs 51.76 crore relating to lease rent on land, Rs 14.29 crore relating to service tax and Rs 0.33 crore relating to GST.

The accounts state that claims against Prasar Bharati that had not been acknowledged as debt were nil.

The broadcaster also disclosed a significant litigation burden. As of March 31, 2025, 67 arbitration cases and 629 court cases were pending against Prasar Bharati, involving a cumulative amount of about Rs 958.40 crore.

The spectrum and space-segment issue is not entirely new. Prasar Bharati had disclosed a substantial liability on this account in earlier financial statements as well. The FY25 accounts, however, show that the contingent liability has increased further.

Rs 2,680 crore government loan liability

The annual accounts also highlight the continuing burden of a capital loan extended by the Central government to Prasar Bharati between 2000 and 2013.

The loan carried interest rates ranging from 14.5% per annum up to March 2006 to 13.5% from April 2011 onwards. Penal interest was applicable at an additional 2.5% per annum on overdue principal and interest.

As of March 31, 2025, the liability comprised Rs 933.39 crore of principal, Rs 1,381.92 crore of interest and Rs 364.91 crore of penal interest.

The total outstanding liability therefore stood at Rs 2,680.22 crore.

The Ministry of Information & Broadcasting had in June 2018 conveyed in-principle approval, following a Cabinet decision, to convert the outstanding loan relating to 2010-11 through 2012-13 into grants-in-aid. The proposal also provided for a waiver of interest and penal interest for the relevant period.

However, according to the annual accounts, the Cabinet decision covering the period from April 1, 2010 to March 31, 2013 has not yet been implemented by the ministry.

As a result, the liability and associated interest burden continue to remain on Prasar Bharati's books.

SIS Live arbitration dispute remains sub judice

The broadcaster's accounts also disclose a long-running dispute with SIS Live arising from an arbitration award.

A three-member arbitration tribunal in July 2020 directed Prasar Bharati to pay SIS Live Rs 65.10 crore along with simple interest of 9% per annum from January 1, 2011.

Following a Delhi High Court order in May 2021 directing Prasar Bharati to deposit the award amount, the broadcaster deposited Rs 126.33 crore in June 2021, comprising the principal award and interest.

The matter remains sub judice before the Delhi High Court. Hearings continued through 2024 and into 2025, with the case recorded as "part heard" as of the reporting date.

Separately, a service-tax dispute involving Rs 3.55 crore, arising from a demand for April 2007 to September 2007, was dismissed by the Supreme Court in January 2022. A subsequent review petition was dismissed in July 2022.

Prasar Bharati has said it believes it is entitled to adjust this amount against more than Rs 21.96 crore, plus interest, that it claims is separately payable to it by the Service Tax department for an earlier period.

Audit identifies historical accounting corrections

The annual accounts, audited by the Director General of Audit (Central Expenditure), New Delhi, on behalf of the CAG, contain several corrections relating to previous financial years.

These include adjustments to depreciation relating to office equipment, computers, furniture and machinery dating back to FY22.

The accounts also record a correction of an understatement of fixed assets worth Rs 43.89 lakh in FY23 and a correction involving an overstatement of contingent liabilities by Rs 10.85 crore in the same financial year.

Prasar Bharati has been transitioning from cash-based to accrual-based accounting since April 2005. Over the past five years, it has also been implementing a web-based Expenditure Monitoring System across its field units.

A planned Centralised Accounting Software could not be implemented because of operational issues, according to the accounts. The broadcaster has now initiated procurement of Tally software for rollout across its field units to support accrual-based accounting.

Govt support remains key to Prasar Bharati's finances

The Receipt and Payment Account for FY25 records total receipts of Rs 16,162.83 crore across All India Radio, Doordarshan and the Prasar Bharati Secretariat.

The figure is substantially higher than the income and expenditure reported in the accrual-based accounts because it includes inter-unit transfers and other movements of funds.

Government funding continued to account for a significant part of Prasar Bharati's financial resources.

Of the grants received during FY25, Rs 2,315.53 crore was towards salary support, Rs 212.25 crore was provided under the BIND scheme for creation of capital assets and Rs 50 crore was received as general grant-in-aid for content.