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NEW DELHI, March 22

THE Standing Committee on Information Technology is in favour of allowing publication of foreign and scientific magazines while ruling out foreign investment in newspapers and periodicals dealing with news and current affairs.

The Committee, headed by Mr Somnath Chatterjee, which tabled its report in Parliament on Friday, said scientific and technological journals may be allowed to be published from India provided they enter into collaboration with publishing houses dealing with such scientific and technological projects.

"Publication of foreign scientific and technical magazines can be allowed for the benefit of the students of science and technology and the scientific community," said the report.

It rejected the request made by five leading newspaper publishers to permit investments by foreign institutional investors (FIIs), non-resident Indians (NRIs) and OCBs as portfolio investment is permitted in other media sectors such as television broadcasting, Internet and direct-to-home.

The Standing Committee, after looking at different views and opinions, felt that a foreign investor with a minority shareholding could also gain effective control of management and the editorial board of the newspaper through shareholders' agreement and loan agreement.

A foreign investor in the Indian newspaper industry would do so not merely propelled by the lure of returns but also "because of the tempting prospect of gaining enormous clout in the socio-political life of this country," it said.

However, about eight members of Parliament have sent in dissenting notes. These MPs are in favour of allowing FDI in the print media.

The Standing Committee has also asked the Government to formulate a comprehensive print media policy.

Though the Cabinet Resolution of 1955 laid down the basic approach in regard with the entry of foreign print media, "it remains an inadequate basis for such a policy in the new situation".

The Committee has also asked the Government to come up with suitable measures to deal with capital shortage problems of the various small and medium newspapers in the country.

"In particular, the Government should consider putting in place an institutional arrangement for concessional finance for these categories of newspapers," the committee said in its report.

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