The Hindu Business Line : Deferment of FM licence fee is violation of code: EC

THE Election Commission (EC) has paved the way for the Government to encash pending bank guarantees in case FM radio companies do not pay up the licence fee by the deadline, which expires on Thursday.

The EC has said that any deferment of the licence fee payment would be a violation of the code of conduct. This comes at a time when private FM radio companies have stood firm on not coughing up the annual licence fee of over Rs 100 crore for various cities.

The Information and Broadcasting (I&B) Ministry had written to the EC seeking its views deferring payment of licence fees by the private radio companies. Top Government sources said, "Any change in the licence fee would require a Cabinet clearance. Hence, we put up the case before the EC. The EC has said that any deferment is violation of the EC code."

The deadline for payment of the licence fee was April 29, 2004, with a seven-day grace period.

Government officials said if the companies do not pay up, it could encash the bank guarantees. "The Bombay High Court has allowed us to encash the bank guarantees, and we could consider doing just that," they added. All the FM radio companies have deposited bank guarantees equivalent to the first year's licence fee with the Government.

Earlier, when the I&B Minister, Mr Ravi Shankar Prasad, had sought the views of the Finance Ministry on the issue of deferment, the mandarins of North Block had refrained from commenting on the issue and had asked the I&B Ministry to firm up its view. Subsequently, the matter was referred to the EC.

Meanwhile, the private FM companies do not seem inclined to pay up. A senior official in a private FM radio company said status quo should be maintained. "Both the taskforce of radio under the Secretary General of the Federation of Indian Chambers of Commerce and Industry (Ficci), Dr Amit Mitra, and broadcast regulator the Telecom Regulatory Authority of India's recommendations to defer payment of license fee are Government initiatives. The Government cannot force us to pay," he said.

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