New Delhi: The government on Friday gave its approval to financial restructuring of Prasar Bharati, whereby the public broadcaster will from this year have to ensure its operating expenses other than salaries are met from revenue earnings.

The government will meet all the expenses of Prasar Bharati towards salary and salary-related expenses from its non-plan account for five years from 2012-13 to 2016-17.

These measures were a part of the proposal of the Information and Broadcasting (I&B) Ministry on financial restructuring of Prasar Bharati. The proposal was based on the recommendations of the Group of Ministers (GoM) on Prasar Bharati constituted under the chairmanship of the Home Minister, to examine various issues pertaining to the functioning of Prasar Bharati. The recommendations were given over a year earlier.
 
The government will waive accumulated interest on loan-in-perpetuity, interest on capital loan and penal interest thereon. Loan-in-perpetuity and capital loans provided to Prasar Bharati will be converted into grants-in-aid.

From now on, any plan capital support by the government to Prasar Bharati will be in the form of grants-in-aid and not in the form of loans.

The government has also agreed to waive accumulated arrears pertaining to spectrum charges up to 31 March 2011 amounting to Rs 13.49 billion.

The property and assets will be transferred at book value to Prasar Bharati according to the provisions of Section 16(a) of the Prasar Bharati Act 1990. Normal accounting principles will be followed to determine their future value.

The Director General of Audit, Central Revenues (DGACR) will continue to be the nodal auditor of Prasar Bharati and will be assisted by qualified commercial audit staff for the audit of the annual accounts.

Prasar Bharati has been grappling with financial and human resource/employee issues since its inception, which has adversely affected its functioning as an autonomous organisation. In view of the problems being faced by the public broadcaster, the GoM was constituted on 7 March 2006. The GoM was again reconstituted on 21 February 2011 which considered Prasar Bharati‘s future revenue earning potential given its public service broadcasting mandate, and made a number of recommendations for making it financially viable and sustainable.

NEW DELHI: Prasar Bharati has appealed with the Service Tax Department Tribunal (CESTAT) for recovery of Rs 1.6028 billion deposited because of a ?gross calculation error?.

Prasar Bharati sources told indiantelevision.com that the pubcaster had claimed that the demand raised was erroneous, but the Service Tax office had issued a final demand notice on 5 May last year which included a demand of Rs 871 million issued to it in May 2009, with interest and penalty under Section 78. This led to the pubcaster depositing the sum of Rs 1.6028 billion.

A demand notice had been received in May 2009 from the Service Tax Department in respect of service tax liabilities relating to the years 2003-2007-08. This ha stated an unpaid amount of Rs 871 million.

The Member (Finance) A K Jain had in 2011 pointed out this gross error in a letter to Information and Broadcasting Minister Ambika Soni.

The sources said due to systemic deficiencies within the organisation prior to 2007-08, regular returns in respect of Service Tax collected were not being filed. As a result, the Service Tax Department raised the demand based on income and expenditure figures in the published accounts without taking into account the benefit of Cenvat Credit admissible to the pubcaster, which was not claimed due to these deficiencies.

Non-receipt of data from field offices and deficiencies in collection of accurate data have been identified as the main reasons for the flaw. The problem was compounded by lack of trained accounts staff and the pubcaster has now appointed a chartered accountants firm.

Returns are now being filed regularly, and the pubcaster has paid a sum of over Rs 4 billion (Rs 4,653,297,477) including about Rs 500 million (Rs 499,011,611) in CENVAT and the rest in cash for the years 2008 to 2012.

NEW INDIA: Arbitration proceedings by British production house SIS Live for recovery of amounts withheld by Prasar Bharati for breach of the contractual provisions relating to coverage of the Commonwealth Games in 2010 are still continuing.

Prasar Bharati had encashed the bank guarantee amounting to Rs 246 million and withheld a sum of Rs 70.80 million against services provided for Rights Holding Broadcasters.

Prasar Bharati has also withheld a sum of Rs 984 million (40 per cent of the contract value of the contract awarded to SIS Live for Rs 2.46 billion) on account of various disputes.

Information and Broadcasting Ministry sources told indiantelevision.com that the arbitral proceedings are still going on. The arbitration has been invoked by SIS Live under clause 8.2 of the contract with Prasar Bharati.

SIS Live had recently expressed relief recently at the reported move by the Central Bureau of Investigation to seek closure of the investigation against award to it of coverage of the Commonwealth Games.

The High Level V K Shunglu Committee had concluded that SIS Live that were estimated at below Rs One billion, but Prasar Bharati had already paid Rs 1.476 billion up to October 2010.

Interestingly even as the CBI had begun its investigation, the Central Vigilance Officer of Prasar Bharati had also commenced investigations. Following an objection by CBI that these would interfere with the investigating agency?s work, the Ministry directed the CVO to stop investigation on all sixteen issues listed by the Shunglu Committee except one which related to customisation of services, on which the CVO has already submitted a report.

The Ministry had in March last year cleared action in the matter of irregularities of award of contract to SIS Live by then Prasar Bharati Chief Executive Officer Baljit Singh Lalli (who was later suspended on corruption charges in other cases).

It had been stated that the award of broadcasting rights of Commonwealth Games reportedly resulting in loss of Rs 1.35 million. The Shunglu Committee in its report said ?undue benefits? were provided to SIS Live and Zoom Communications.

Lalli along with former Doordarshan Director-General Aruna Sharma were named by the V K Shunglu Committee in the first of its reports to the Commonwealth Games held in the Capital in October 2010.

No sanction was given for prosecution of Sharma in view of an explanation given by her earlier and another detailed note sought from her by the Ministry. It is learnt that she has been asked to submit the note within one week. Sharma had later been reverted to her home state Madhya Pradesh following completion of her term in Doordarshan.

New Delhi: Prasar Bharati, India?s public broadcaster, is putting in place plans to increase its revenues.

Aggressive marketing of advertising slots, putting to use spare infrastructure, bringing about an improvement in content, augmenting DTH services and sharing of towers are among the measures being taken by the broadcaster to bridge the substantial gap between its revenues and expenses, according to sources in the broadcaster.

Prasar Bharati, which operates a group of Doordarshan television channels, has always found its revenues to be much less than its expenses. In 2011-12, its revenues were Rs 14.09 billion, just 48 per cent of its operating cost of Rs 28.90 billion.

Minister of State for Information and Broadcasting S Jagathrakshakan said Prasar Bharati?s revenue generally constituted 40 to 50 per cent of the annual operating cost.

Prasar Bharati?s revenue in 2010-11 was Rs 13.10 billion, 51 per cent of the operating cost of Rs 25.47 billion. In 2009-10, the revenue was Rs 11.76 billion, 43 per cent of the operating cost of Rs 26.828 billion.

The minister said if the government accepts the recommendations on financial restructuring of Prasar Bharati made by a Group of Ministers, it would help the pubcaster to become financially viable.

The ministry has already prepared a cabinet note to bring about financial restructuring of Prasar Bharati that seeks to ensure that all operating expenses are borne from the broadcaster?s own income.

The note is expected to be taken up by the union cabinet for consideration soon after inter-ministerial discussions on it are over.

The note is based on the recommendations of the Group of Ministers Prasar Bharati, which suggested that government non-plan support should be extended for meeting the total expenses on salary and salary-related expenses and augmentation and replacement of capital assets for the five years from 2011-12 to 2015-16.

The GoM had also recommended that accumulated arrears of space segment and spectrum charges up to 31 March 2011 should be waived.

The recommendations of the group of ministers also suggested that all loans extended to the public service broadcaster should be converted into grants-in-aid and interest accrued on the loans should be waived.