INS oppose Advt rate subsidy to navratna PSUs

Bangalore, Sep 18: The Indian Newspaper Society (INS) today opposed subsidy in advertisement tariff to Public Sector Units enjoying Navratna status and sought a level playing field as they compete with this private sector and large multinational corporations.

INS Outgoing President Jacob Mathew in his Presidential address to the 67th Annual General Meeting of INS here said that there was no justification in demanding subsidised charging DAVP tariff for these PSUs from the newspaper industry as they function with complete financial freedom in a liberal economic environment.

''Advertising by PSUs is not all about social issues. They advertise to enhance the sale of products and services'' he added while opposing the new advertising policy requiring all PSUs and autonomous bodies to route their advertisng through DAVP, at highly subsidised rates.

The industry demand for a card rate based structure had been ignored by the DAVP Rate structure committee which has effected in an increase of only 4 per cent, based upon the traditional 'cost-plus' approach, he added.

INS had advised members not to accept PSU advertisements on DAVP rates. A similar advice was issued last year for Prasar Bharati and Doordarshan Advertisements, he said, and urged the members to take a united stand on the issue so that the government understand the industry's reasoning and urgently reconsider the issue.

He said the Society had also taken up with the Government to review some of the issues mentioned in the policy which were adversly affecting the interest of INS members.

Mr Mathew quoting industry estimates said the print media continued to enjoy about half of the advertising business in the country which had a turnover between Rs 12,000 crore and Rs.14,000 crore. The share of television was estimated between 38 and 42 per cent while that of Radio was still small at two per cent. However the recent explosion of FM licenses suggest that radio would soon emerge as a significant claimant for advrtising rupee.

''However we are concrned only with TV for the moment, because the Radio story has yet to reveal itself'' he added. ''In the long run the threat from TV may be more significant as TV channels proliferate in the news area'' he said, adding that strategies need to be worked out to ensure that the press continued to be a major player in the country's democratic process.

Referring to projects by Price Waterhouse consultants and INS projections he said the advertisement revenue of the press medium would continue to grow at a healthy rate of 12 to 25 per cent per year over the next five years.

He said as the dominant player in the advertising market, Newspaper industry need to ensure continous creative process of brand building so as to devise engaging and effective ways of utilising the advertsing space sold by newspapers. The industry also need to educate and equip media planners and buyers on deploying the press medium effectively in an environment in which TV appeared to offer an enticing alternative.

Referring to the Impact Multiplier study, he said the first phase of the study based on the largest field survey of its kind anywhere in the world, sought to quantify the incremental value of deploying the press advertising in campaigns, which might otherwise have been released only through TV. The second phase of the study was under press and would be completed by the end of 2006. The study would deliver a software that could be dovetailed with NRS and other media database to optimise the use of advertising funds.

Mr Mathew expressed concern over the recent changes in format for applications for import entitlement for newsprint and said that through such changes the government could be trying to introduce adminsitrative control on quantities of newsprint being imported by INS members. ''The Society believed that the benefits of a liberalised trade policy should not be denied to the newspaper industry''.

He also expressed hope that the INS case for a zero per cent Value Added Tax on newsprint got a favourable decision from the authorities.

On fiscal policies affecting the industry he mentioned efforts taken by the Society to successfully drop the move to levy a service tax of 10.2 per cent on advertising space purchased by advertising agencies as also the restrictions on concessional rates of import duty on newsprint roll widths of less than 36 cm. However the Society was continuing its efforts to reduce the customs duties on heat set offset printing machines with speeds of over 70,000 copies per hour, computer to plate digital image transfer equipment and high speed mailroom equipment besides total exemption from the purview of fringe benefit tax.

He said the newspaper industry could exercise its intellectual freedom and perform its designated role only if it remained economically viable.

UNI