In a move aimed at making the public broadcaster self-dependent, the government is all set to reduce the financial support to Prasar Bharati by half starting this fiscal. This effectively means Prasar Bharati will now get annually around Rs 600 crore less from the government going forward and it will have to fend for itself to meet the shortfall.

The government move will effectively reduce by half the non-plan outlay component given to Prasar Bharati from the budgetary allocations of the information and broadcasting (I&B) ministry. The non-plan support to Prasar Bharati accounts for over 62% of the total budgetary allocations of the I&B ministry. A reduction in financial support to Prasar Bharati will also mean that the budgetary allocations of the I&B ministry will also reduce accordingly.

?We feel Prasar Bharati will be able to generate 50% of its operational expenses and therefore the group of ministers (GoM) have taken a decision in this regard,? I&B minister Ambika Soni told FE.

However, according to sources, this move became inevitable as the gross budgetary support to the I&B ministry for the 11th Plan period (2007-2012) has already overshot the allocated amount of Rs 5,439 crore, with two more fiscal years to go.

In a meeting of a group of ministers (GoM) held on April 16, it was decided that the government will provided for only 50% of Prasar Bharati?s annual operating expenses while rest will have to be generated by the public broadcaster through its internal budgetary resources. The GoM was reconstituted in February to look into the financial restructuring of Prasar Bharati. The meeting was chaired by home minister P Chidambaram and attended by information and broadcasting minister Ambika Soni among others.

Till now, Prasar Bharati gets the government support under three heads?grants-in-aid, loans and investments in public enterprises. The grant consists of plan and non-plan funds. Following the GoM decision, the government will reduce the non-plan allocation by half while it will continue to support Prasar Bharati through plan funding and loans.

The non-plan outlay allocated to Prasar Bharati is utilised for meeting the cost of operating expenses and augmentation, replacement and maintenance cost of capital assets of the AIR and DD besides meeting the shortfall in their salary component. This means, Prasar Bharati, which clocked in excess of Rs 1,000 crore in revenue for 2009-10 fiscal, will have to fund its operational expenses from within its resources.

This comes at a time when Doordarshan posted over 20% jump in its revenue for the fiscal 2009-10 crossing Rs 983 crore. Last month, Aruna Sharma, director general Doordarshan had told FE that it was close to achieving an operational break even. With more funds required to meet the operational breakeven, both Doordarshan and All India Radio will have to look for more revenue generating opportunities, experts said. The GoM on Prasar Bharati also decided that the government?s contribution to Prasar Bharati may be reviewed after five years from now and if feasible and the financial support to the public broadcaster may further be scaled down from 2014-15 onwards.

This was the first meeting of the GoM under Chidambaram?s chairmanship. The other members of the GoM who attended the meeting included urban development minister SJaipal Reddy, law & justice minister M Veerappa Moily, minister of state for corporate affairs Salman Khurshid, minister of state for Parliamentary affairs Prithvi Raj Chavan and minister of state for finance Namo Narain Meena.

According to another GoM?s decision, the property and assets of Prasar Bharati will be transferred to the public broadcaster on their book value calculated using ?normal accounting principles?. Some other decisions taken by the GoM include allowing Prasar Bharati to fill up its vacant posts. This, however, will follow the formulation of Recruitment Regulations and Service Conditions to be set up by the Public Broadcaster as per the provisions of the Act governing it.