Payments worth Rs 57 crore to broadcasters pending with DAVP

The Directorate of Advertising & Visual Publicity manages the advertisement campaigns and publicity initiatives of central government ministries and departments

e4m by Saif Ahmad Khan
Published: Jul 26, 2017 8:17 AM  | 4 min read

The Directorate of Advertising & Visual Publicity (DAVP) has not released payments worth Rs 57 crore to news broadcasters. The sum total outstanding amount to be paid by DAVP to news broadcasters for airing the various central government advertisements was confirmed to exchange4media by two top-level industry sources. Speaking on the condition of anonymity, a source entrusted with decision making at a large media network revealed that the amount has “piled up continuously” over the past several years and not just the last six months. Another high profile media executive who specialises in revenue generation agreed that the delay in processing payments on the part of DAVP is a “long-standing issue” and an “age-old problem”.

Why the delay?

Pinning the entire blame for the delay in payments on inefficient financial planning and lack of fiscal discipline, the source specifically highlighted a number of scenarios responsible for the situation. It was argued that the onset of a new government is often followed by reallocation of budgets. “They hold back the funds allocated by the previous government (to promote a particular scheme),” said a source, adding that when funds don’t get reallocated to the DAVP on time, they tend to withhold the payments.

Secondly, sometimes the business which is done through DAVP exceeds the budgetary allocation. In such a case, DAVP again takes additional time to get the money sanctioned from the concerned client. Moreover, a change in guard at the top of a ministry does not help the broadcasters either with the process getting mired in bureaucratic red tape. One source insisted that the government ministries are not suffering at the end of the day since they have already communicated their message to the target audience. Only the service providers are left high and dry.

Booking order no guarantee of payment

Calling for a substantial change in domestic policy, a source remarked that the difficulty with the booking order is that it is merely indicative of the intent to pay. “A booking order issued is not a guarantee to the fact that the payment will be made,” claimed a media veteran. On the contrary, it was pointed out that a purchase order in European countries as also the United States is tantamount to having a draft in hand. While a certain protocol is being followed as far as the relationship between a media agency and broadcasters is concerned wherein payments are made within 60-90 days unless a dispute arises, there is no existence of such a mechanism vis-a-vis the government.

“The DAVP is very slow in making payments,” stressed the ad sales head of a media company. Industry sources agreed that the attitude of the establishment is the same irrespective of the government in power. Therefore, it is not appropriate to simply blame the incumbent government when these problems have persisted for years. As per one insider, issues pertaining to payments have been around for 6-9 years. Though exchange4media wrote to DAVP Director General Esther Kar seeking her response to the entire episode, her reply could not be ascertained at the time of filing of this report. The News Broadcasters Association (NBA) also preferred to stay quiet.

Is there a solution?

Although it is not yet known as to how much money DAVP owes to news broadcasters individually, sources, however, conceded that delays are across the board. One source claimed that the pending amount in the case of general entertainment channels (GEC) could be more. “The broadcasters have already taken up a stand (boycotting DAVP’s empanelment list and new policy guidelines) with the fresh rates on offer being too low and the payments not coming,” asserted a source. Nevertheless, it was indicated that the issue can be resolved if both sides came together to the negotiating table. So far, the meetings between the industry bodies and DAVP have not managed to find a solution.   

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