Why be selective about FDI in print?

Ban foreign-owned satellite TV channels, imported newspapers and the Net

Bibek Debroy

Has India changed since 1955? What a stupid question! Of course it has. But we continue to hanker after 1955. 1955 was a wonderful year. Globally, India was much more important in 1955 than it is in 2001. The share in world exports is just one example. Think of all the wonderful things accomplished in 1955. In Nepanagar in Madhya Pradesh, India’s first newsprint factory began production. The Khadakvasla Defence Academy was set up. The Children’s Film Society, the Integral Coach Factory in Perambur, the Central Coal Mining Research Institute in Dhanbad and the National Chess Championships were inaugurated. We decided to eradicate leprosy and filaria. Karnataka was created. Lothal was discovered.
Untouchability became an offence. Minimum ages for marriage were increased. The Employees’ State Insurance Corporation came into being. The manufacture of motorcycles, scooters and three-wheelers started. The Imperial Bank was nationalised. We ordered the Portuguese to close their legation in Delhi. And most important of all, Bulganin and Khruschev visited India. Ipso facto, decisions taken in 1955 are untouchable. We must fight imperialism and nationalise everything in sight. Decisions taken in 1955 are sacrosanct.

What is the 1955 decision? There is the September 1955 Cabinet Resolution. “No foreign-owned newspaper or periodical should, in future, be permitted to be published in India. Foreign newspapers and periodicals which deal mainly with news and current affairs should not be allowed to bring out Indian editions.” Then there is the 1953 Press Commission note. “We consider it highly desirable that proprietorial interests of daily and weekly newspapers should vest predominantly in Indian hands.” Unfortunately, there is too much that is vague.

Can foreign-owned newspapers or periodicals be imported into India? What if they sneak in through electronic versions? What are news and current affairs? Take something like “Temptation Island”. That is both news and current affairs. Ideally, we would have liked foreign newspapers to bring out Indian editions without edit pages. But that is impossible to implement. Or consider the 1953 Press Commission note. What is highly desirable? What if it is a fortnightly newspaper? What is proprietorial? What is predominantly? The permutations are endless.

We now have a draft report by the Parliamentary Standing Committee on Information Technology. Quite rightly, it concludes that we must not get bogged down in semantic details. “The contextual significance of the cabinet resolution of 1955” must be taken into account. And the contextual significance is clear. You can’t differentiate news and current affairs from other stuff like scientific and technical journals. To take a recent example, scientific and technical journals might have discussions on human cloning and we know that this is against Indian culture. So let us keep all of it out.

You can’t differentiate foreign direct investments from foreign portfolio investments in media. So let us keep both out. Allowing limited investments like 26 per cent won’t work. Once the wedge is driven in, equity caps will insidiously creep up. In any case, how much equity do you need to retain managerial control? Indian editors won’t suffice, we know editors are twisted and turned by ownership. You can’t differentiate print media from electronic media. Let’s admit we made a mistake and let’s pass a law against foreign ownership of satellite TV channels. We can’t have a situation where the elite has access to expensive imported newspapers and the ordinary citizen is deprived access to cheaper newspapers, had they actually been published in India. So let us ban imports also. Then there is the matter of the Internet. Imagine the hell that will break loose if Indians begin to read Dawn on the Internet. This isn’t much of a threat now. But the situation will change once Internet connectivity improves. Hence, we need to ban the Internet.

If you think Indian culture is under no threat, think again. Do you know what happened at the time of the 7th Kolkata Film Festival? The official web-site was www.calfilmfestival.org. But www.calfilmfestival.com is a porn site. Several people (and this may have included children) wanted to visit the official web-site, but visited the porn site by mistake and were thoroughly corrupted in the process. This wouldn’t have happened had the Internet been banned.
There is a completely specious argument that floats around. The status quo discriminates against smaller newspaper groups because they don’t have access to capital. For something like media, capital is not the main input. The main input is knowledge and human resources and we have plenty of that in India. To the extent capital is required for modernisation, we know there are asymmetries in the capital market. That is precisely the reason government intervention is needed and public sector financial institutions were set up. Let institutions like IDBI lend to the smaller newspaper groups, instead of lending to companies like Enron and unnecessarily getting into trouble. Why do we need foreigners for newspaper stock? What are institutions like the Unit Trust of India for?

Once the cobwebs of the mind are cleared, you realise that India must be built by Indians. We must have self-reliance where we can. That is the true contextual basis of the 1955 resolution. Why do we need Hyundais and Fords when we had Fiats and Ambassadors? Why do we need Pepsi when Haldiram and Campa Cola can suffice? Do Western fast food chains offer anything that Nirula’s doesn’t? Don’t mention pizzas. Amul now produces pizzas at less than one-tenth the cost. This is the old ‘potato chips versus computer chips’ argument, better articulated now, since we have a clearer position on foreign involvement in media. We need foreign investments where we need it, not indiscriminately and across the board.

This business of looking to the outside world for everything has been India’s doom. We forget our own strengths. We cloned and produced test-tube (petri dish) babies more than three thousand years ago. If you don’t believe me, read up the Mahabharata for the origin of the name Dronacharya. If “drona” wasn’t a petri dish, what was it? We forget all this and look instead towards companies based in Massachusetts.