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Low fund proposal short-circuits Digital India plan

business Updated: Feb 26, 2007 06:08 IST

The Information and Broadcasting ministry’s mega plan for digital television and cinema for the country in the next five years may hit financial roadblock as the Planning Commission has proposed just Rs 585 crore for the ministry for the financial year 2007-08 against Rs 538 crore in 2006-07.

The I&B ministry had demanded Rs 1749.9 crore with a primary idea to convert Prasar Bharati — that includes Doordarshan and All India Radio — into a digital mode. The commission, however, decided to adopt a cautious approach considering the heavy losses of Prasar Bharati. “Prasar Bharati should become turn a revenue earner to justify the huge fund allocation demanded by the ministry,” a commission official told HT.

This does not mean that the ministry’s proposal for digital television and cinema has gone for a toss. Government officials say the Finance Ministry is considering proposals to lower tax regime on import of films, digital equipment and set top boxes. The ministry has proposed a tax structure of about 10-12 per cent as compared to present ranging between 16 to 24 per cent. The ministry has also proposed to lower entertainment tax on films.

On its part, the ministry has constituted five sub-groups to media to suggest ways to meet the new technological challenges and encourage India media. The groups are on digital television, export of films, certification issues of films and help in growth of multiplexes. According to government estimates, the Indian entertainment industry would account for Rs 58,000 crore by 2010, if the industry grows at an annual rate of 18 per cent.

Although digital media is expected get tax benefits, the government does not seem to be keen on continuing funding of many present schemes of the I&B Ministry in the next financial year.