THREE DAYS before the 2017-18 financial year ended, the Union Ministry of Information and Broadcasting signed a Memorandum of Understanding (MoU) with Prasar Bharati, following which it released Rs 365 crore the next day — the ministry had blocked funds since January. The MoU, according to sources, has two crucial points which are likely to become new flashpoints between Prasar Bharati and the ministry.
First, the MoU states that Prasar Bharati “shall endeavour to augment its productivity and efficiency in its operations and timely pay its dues to government department/ organisations including space segment and spectrum charges to the Department of Space and Department of Telecommunications.”
This means that spectrum and space charges, with an estimated liability of Rs 1,800 crore, will not be waived off. In 2012, a Group of Ministers had waived off these charges, amounting to Rs 1,349.54 crore till March 31, 2011. Prasar Bharati has not paid these charges since then.
A senior Prasar Bharati official pointed out that since it is a public broadcaster, it is active in areas that are not financially viable. Jawahar Sircar, who was Prasar Bharati CEO from February 2012 to October 2016, said the “exemption” was actually “an indirect subsidy for the programmes and uneconomic stations” that the broadcaster has to run.
The second contentious issue pertains to the revised salary structure for all Prasar Bharati employees recruited after October 5, 2007. The MoU states that Prasar Bharati has to bear the “entire liability of Prasar Bharati employees recruited after 05-10-2007 as per commitment of the VI CPC (Central Pay Commission). Of the incremental amount on account of VII CPC, the ministry shall bear only 80 per cent, and the rest shall be borne by Prasar Bharati.”
This is estimated to cost an additional Rs 60-70 crore annually, said sources.
In 2012, the GoM had promised to cover the entire cost of Prasar Bharati’s full-time employees. “During the next five years, from 2012-13 to 2016-17, government non-Plan support will be made available to PB for meeting 100 per cent expenses towards salary and salary-related expenses,” it had said.
Prasar Bharati CEO Shashi Shekhar Vempati said these issues would be discussed at the board meeting. The board had last “deliberated” on a draft of the MoU in September 2017, after which it had given its nod. Vempati said that since Prasar Bharati is governed by an Act of Parliament, “there is flexibility in the MoU” to preserve its autonomy.
Sircar said that since all the Prasar Bharati employees were hired after the ministry’s approval, the understanding was that the ministry would bear the cost. He said the public service broadcaster does not have surplus funds, and agreeing to meet these expenses would be “suicide” for it.
According to sources, the MoU was signed on March 28. Sources said the ministry had released the funds as the financial year would have ended, and this would have impacted next year’s budget.
The ministry, which releases about Rs 200 crore every month — most of it goes towards payment of salaries of the 29,000 employees of Prasar Bharati — had blocked funds since January. Prasar Bharati had then paid salaries out of its own funds.
“The salary problem has been sorted out. But the new clauses in the MoU will create new issues for Prasar Bharati,” said a top source. “Prasar Bharati has signed the MoU despite having reservations, because it did not want to give the ministry another excuse not to release the funds. However, it will be taking up the issue with the government,” added the source.
This is the first time that Prasar Bharati had to sign an MoU with the government. In 2017, the Finance Ministry had issued revised General Financial Rules stating that all autonomous organisations which get annual budgetary support of over Rs 5 crore “should be required to enter” into an MoU with their administrative ministry, “spelling out clearly performance parameters, output targets in terms of details of programme of work and qualitative improvement in output, along with commensurate input requirements.”