NEW DELHI: The government is likely to accept a recommendation of an expert committee that private radio FM ventures can attract foreign investment – a la print and electronic media – and that news should also be allowed to broadcast.
However, the government is still undecided on whether to allow the existing and future FM radio ventures, the benefit of networking.
Networking or chain broadcasts means simultaneous transmission of programmes by various broadcast stations (transmitters).
Sources from the information and broadcasting (I&B) ministry today told indiantelevision.com that the ministry would wait for some more time to get feedback, before preparing a note on important recommendations 
for the Cabinet to take a final view.
“Still, going by the trend in the other segments of the media, especially where foreign equity norms are concerned, private FM radio ventures ought not to be made exceptions,” a source explained, adding that the government would like to put in enough safeguards to see that no company gets a chance to make a mockery of the laws. This was a trend witnessed earlier this year, when the news channels uplinking from India were allowed to bring in 26 per cent foreign equity.
At the moment, only foreign financial institutions are allowed to make portfolio investments in FM radio ventures as per the Reserve Bank of India specifications.
A government-initiated panel, headed by Ficci’s secretary-general , Dr Amit Mitra, in its report submitted earlier this year, had suggested allowing foreign direct investment (FDI) up to 26 per cent in FM broadcasting (news as well as entertainment).
“While calculating the 26 per cent limit on FDI, the foreign holding component, if any, in the equity of the Indian shareholder companies of the licensee should be duly factored in on a pro-rata basis to determine the total foreign holding in the licensee,” the panel had observed, adding, “The equity held by the largest Indian shareholder group should be at least 51 per cent of the equity, excluding that held by public sector banks and public 
financial institutions.”
As far as allowing news and current affairs programming on FM radio, apart from All India Radio, is concerned, ministry sources hinted that barring private players from this “doesn’t really serve” any purpose as the sources of news and current affairs for an average Indian has increased, ranging from various modes of TV transmissions to Internet to newspapers.
The very fact that the ministry would take certain recommendations to the Cabinet is indicative that the government is positive on further opening up the FM radio field to make it more investor-friendly, even while giving the 
listener more choice.
But one thing the government is not clear about, according to the source, is whether to agree to the FM radio panel’s recommendations on allowing networking for private FM radio players. The ministry is worried if it would lead to less choice for listeners due to same programming being repeated at various centres.
Licensees in phase one are not permitted to network, except on important occasions with the prior permission of the government.
Pointing out that market mechanism would ensure differentiation of content, while making a strong case for allowing networking, the Mitra panel had said, “Networking can significantly reduce the capital expenditure and operating expenditure of a broadcast station (especially in small cities).”
As a precautionary measure, the panel had stated that networking may be permitted during the opening of the second phase only amongst the broadcast stations of the same entity and not across the licensees. Furthermore, networking should not be permitted in the same city, the panel said.