Cover Story

Autonomy for Prasar Bharati

It is difficult to accept that greater autonomy is the panacea for the ills of the Prasar Bharati Corporation. Until autonomy and accountability go hand-in-hand, nothing concrete can be achieved

img-aug14-40AUTONOMY has two essential components: strategic and operational. While adopting the Board-managed form of organisation with absolute operational freedom and flexibility in decision-making, the Prasar Bharati Act clearly spells out the strategic areas where the government would exercise, in a limited manner, a degree of influence and control. These areas are, Board-level appointments, provision for directives under Section 23 in specific cases in the interests of sovereignty, unity and integrity of India, power to seek information under Section 24 and the requirement of government approvals in matters of regulation for terms and conditions of service of employees. And, of course, like all public institutions and public service broadcasters (PSB) across the globe, parliamentary accountability is provided for. Within this framework, there are two major areas where, in practical terms, dependence upon the government tends to curtail the freedom and capacity of the Corporation to discharge its obligations and impair its autonomous character. One is the matter of personnel policy and management and the other is the issue of financial support arrangements.

On the question of personnel management, certain transitory arrangements were provided for under the Act. These were for the continuation of the services of cadre-based staff deployed at the time the Corporation came into being in 1997, the most critical being that of the Indian Information Service (IIS). It was envisaged that at some future point in time, as soon as practicable, these would be replaced by professional cadres established by Prasar Bharati itself. Unfortunately, despite the fact that more than 15,000 vacancies had accumulated under various cadres and grades by the beginning of 2007, attempts to fill them by fresh recruitment or promotion were mostly half-hearted and ineffective. Effective steps were also not taken to create the Corporation’s own cadres, keeping in view the transitory arrangements. Thus, manpower planning, recruitment and development was a major casualty.

BELATED steps initiated, especially over the last two years, to address the problem of employee recruitment and promotion, seem to be too little and rather late. Despite the fact that the government had agreed to sanction 3,452 vacancies, identified as critical, way back in 2009, only about 1,150 employees have been recruited so far. The Ministry is yet to issue sanction for the remaining agreed posts. Though ad hoc promotions were finally given in the case of key cadres, regular promotions are still held up. A good part of the problem relates to numerous ongoing judicial proceedings in various courts—these arising due to utter neglect of personnel issues. Such tardy progress in resolving the extremely critical issues at hand can only give rise to questions about the efficacy of the statutory provisions in the matter.

Belated steps initiated, especially over the last two years, to address the problem of employee recruitment and promotion, seem to be too little and rather late. Despite the fact that the government had agreed to sanction 3,452 vacancies, identified as critical, way back in 2009, only about 1,150 employees have been recruited so far

The fact that even the limited progress achieved in recent times has focused on engineering and the hitherto neglected programme cadres, ignoring the crucial requirements of manning the personnel and finance functions, speaks volumes about the myopic vision of the planners. Needless to emphasise that these critical auxiliary functions, especially the finance function, suffers from inadequate availability of even basic minimum critical staff, both in terms of experience and qualifications. Prasar Bharati continues to depend on various government controlled cadres like IIS, CGA, CCS, and so on, to meet its manpower requirements. To this extent, taken together with the huge bureaucratic hurdles and insensitivity faced in matters of manpower planning, recruitment and development, Prasar Bharati continues to not only remain handicapped but the autonomous character of the Corporation, especially in respect of the news division, stands compromised.

The extent to which Prasar Bharati can remain truly autonomous, within the contours spelt out under the Act, also depends on the financial support mechanisms allowed by the government. Section 17 of the Act provides for governmental budgetary support by way of grants, or loan, or by way of alternative mechanisms like levy of licence fee. As a public service broadcaster, profit-making is not the primary objective of the Corporation. However, it cannot be denied that in line with the practice of funding PSBs in different countries, Prasar Bharati is also expected to maximise its earnings from commercial broadcasts to reduce dependence on budgetary support to the extent possible.

Various committees have made recommendations in this regard from time to time. Finally, the matter was set to rest by the government decision in 2011 to assure budgetary support to meet the salary and salary-related costs, while requiring the Corporation to generate adequate revenues to meet its establishment and programme content related requirements. Additional support is provided by way of plan outlays for meeting the Capital costs for expansion and modernisation and for content development expenses for discharge of PSB obligations.

It is true that the government could come up with some commitment by way of a stable formula for funding only in 2011. However, in actual practice, at least till 2008-09, when serious questions over the transparency in the utilisation of funds and lack of internal financial discipline and control mechanisms cropped up, the Corporation was never seriously handicapped for want of funds. In fact, the available accumulated cash surplus as on March 31, 2008, stood in the region of Rs. 1,000 crore (as good as reduced to near nil by 2013-14). Unfortunately, management laxity ensured that the available surpluses were hardly put to productive use. The result was that the government adjusted Rs. 500 crore from out of its non-Plan allocation, citing the available surpluses, towards essential employee related commitments during 2009-10.

If we consider the budgeted figures for 2014-15 based on the existing support formula, the government would provide non-Plan support of Rs. 1,875 crore, leaving a gap of approximately Rs. 1,710 crore on account of other essential revenue expenditure. The other costs include about Rs. 500 crore on account of content generation costs. Revenue generated during 2013-14 stood at Rs. 1,623 crore and with a conservative estimate of 5 per cent growth in revenues, the Corporation should be just able to balance out its requirements. However, that hardly leaves surpluses to finance desirable initiatives. To that extent, Prasar Bharati continues to live in a state of uncertain finances. This raises the crucial question on whether the government-approved formula is equitable and consistent with the need to meet the Corporation’s essential needs and to protect its autonomous character.

The key lies in the Corporation’s ability to ensure efficient utilisation and generation of resources. It is essential that this is bedrocked in a sound organisational framework and transparency in operations, areas where the Corporation has failed to perform

A quick evaluation of financial results shows that while the salary costs have gone up from Rs. 1,572 crore in 2010-11 to an estimated Rs. 1,890 crore in 2014-15, there has been a sharper escalation in establishment costs and content generation costs—from Rs. 760 crore in 2010-11 to more than double based on the budgetary estimates for 2014-15. At the same time, revenue generation has increased from Rs. 1,301 crore to an estimated Rs. 1,623 crore in 2013-14, growing at less than 9 per cent, continuing the earlier sluggish trend since 2007-08 when revenue stood at approximately Rs. 950 crore. The more disturbing feature is that the relative contribution of Doordarshan vis-a-vis All India Radio has come down in recent years, despite its revenue potential.

THE problem is crystal clear. Revenue generation is not keeping pace with the increase in revenue costs. Also, the gap is substantially high considering that the employee costs are assured to be funded by the government. Either the revenues are sub-optimal, or the costs are uncontrolled. If it is neither, then there is a case for the government to review its funding formulation. Both are management issues for which absolute operational autonomy is provided for under the Act.

Experience has shown that the real issues are about the institutionalising of sound systems and internal management. The key lies in the Corporation’s ability to ensure efficient utilisation and generation of resources. It is essential that this is bedrocked in a sound organisational framework and transparency in operations. That is precisely where the Corporation has been unable to lift itself out of the morass into which it has sunk over the years.

There are numerous examples of gross mismanagement, bungling and neglect of critical organisational issues, either deliberate or otherwise. Just a sample of these would show why the problems of Prasar Bharati can simply not be explained on the benchmark of the degree of autonomy enjoyed by the Corporation.

As a clear sign of organisational misdemeanour and neglect, while more and more autonomy has been demanded from the government, there has been little decentralisation within the Corporation at various key levels. There was a situation where the Chief Executive Officer (CEO) not only centralised all powers, including those of the Director-Generals (DGs) unto himself, but also claimed he had absolute authority for all decisions and refused to comply with Board directives/decisions. The situation came to such a pass that the Delhi High Court was compelled to step in to enforce the Board’s orders and ensure that the Board proceedings were recorded properly.

All this time, the government chose to ignore blatant violation of the Act and Rules. At the same time, the CEOs, without exception, have consistently refused to share power with other functional whole-time members on the Board, despite the latter’s statutory position and responsibilities. The DGs, while demanding more autonomy from the CEO, have been reluctant to further decentralise powers to regional levels, despite functional imperatives.

The year 2011 saw Prasar Bharati touch a new low. The interpretation of the concept of autonomy was given a new dimension when the I&B Ministry chose to remain a mute spectator to blatantly illegal decisions, in areas of jurisdiction which belonged to the government as per the Act, allowing the Board to appoint a part-time member as the CEO of the Corporation over the senior whole-time members and to vest executive powers with the part-time Chairperson in violation of the statutory provisions. The illegally appointed Acting CEO usurped the functions and powers of the whole-time Member, Finance and Personnel, without batting an eyelid. The government also looked the other way when committees of part-time members were constituted and given unbridled powers, even in functional areas statutorily vested in whole-time members.

DURING this unfortunate period till the beginning of 2012, institutional interests were sacrificed at the altar of personal interests and intrigue and the Board proceedings were recorded arbitrarily, deliberately omitting or distorting the views of members whose observations were not to the liking of a small coterie in control. The Board exercised, with the acquiescence of the Ministry, absolute autonomy and authority even if it meant emasculation of the provisions of the Act. Nobody complained about the lack of autonomy when all this was going on. And nobody even talked about accountability of those who were busy toying around with the Act of Parliament and financial rules and regulations.

Till 2008-09, when serious questions over the transparency in the utilisation of funds and lack of internal financial discipline and control mechanisms cropped up, the Corporation was never seriously handicapped for want of funds. In fact, the available accumulated cash surplus as on March 31, 2008, stood in the region of `1,000 crore

Despite about two decades of coming into being, serious transparency issues, especially in the matter of financial transactions, continue unaddressed. A deliberate weakening of top-level financial control and monitoring systems, arbitrariness in financial decision-making, absence of any meaningful and effective internal audit and internal finance advisory mechanisms continue to remain alarming features.

THE Corporation is yet to put in place a well-defined finance system with proper checks and balances. The system of billing and debtor monitoring continue to remain archaic, putting question marks on the credibility of existing mechanisms. The finance function depends upon programming and engineering executives, in a large measure, to even record and prepare basic financial data. Tax compliance methods too are outdated.

Such a diffused system, diluting the system of accountability, seems to have suited the powers that be and has given rise to huge opportunities for leakage of revenue. The grossly sub-optimal generation of revenues and uncontrolled escalation in establishment costs due to weak budgetary control and monitoring systems year after year is, therefore, not surprising. Instances of financial bungling abound.

A simple example is of advertising revenue from televised cricket matches being assessed and sold at an average card rate of much less than Rs. 60,000 per 10 seconds even for highly popular matches. This, when the prevailing market rate, by common knowledge, is anywhere in the region of Rs. 2-3 lakh, and extending beyond Rs. 5 lakh and more per 10 seconds for more popular matches/series. Thus, while the seven-match Indo-Pak series could earn a gross revenue of nearly Rs. 90 crore in 2007 when general ad rates were lower, the reported revenues for the immensely more popular one-day World Cup cricket series played in India in 2011 was a measly Rs. 58 crore for 10 matches, including the finals.

The strictures passed in the Special Audit Report commissioned by the I&B Ministry on the subject have remained confined to dusty files with no lessons learnt or accountability fixed. The arbitrariness in deciding the rates at which serials were produced under the Scheme for Commissioning of Programmes—and which surprisingly became the main source of content generation 2011 onwards—defy all norms of financial prudence.

During the Commonwealth Games, a huge amount of approximately Rs. 400 crore was spent without creating any long-term assets for the Corporation, just because it suited certain vested interests at that time. The Corporation completely bypassed the finance wing and intriguingly decided to outsource major works. This even after Patrick Furlong, the Commonwealth Games Federation-appointed consultant, acknowledged DD’s capability to produce its own feed for at least 10 of the 17 events to be broadcast.

The high definition content producing equipment, which was taken on hire in 2010 for the Commonwealth Games at exorbitant cost on the justification that there was no in-house requirement in the near future, got processed for purchase at huge cost within a year of the event with exactly the opposite argument. The Board did not find any limitation on its autonomy even when, in utter disregard of applicable rules, it decided to hire equipment for expansion of DTH facilities against a Cabinet-approved sanction at a Capital cost of Rs. 97 crore. There are numerous such instances of financial bungling and profligacy and the list goes on ad nauseum.

It is, therefore, difficult to accept that autonomy is the cause, and grant of greater autonomy the panacea, for the ills of the Corporation. It is also difficult to accept that the form of organisation provided for under the Act is flawed and requires drastic changes, simply for the reason that the organisational systems have hardly been built up and operated as envisaged. It seems rather fashionable to cite lack of autonomy as a convenient alibi for non- or sub-optimal performance. Autonomy as a goal leads nowhere, contrary to what one would like to believe.

The key issue, which is hardly much spoken about, is that of accountability and its enforcement. Autonomy and accountability have to go together and cannot form part of isolated chambers. It is the men at the top, whether in the government or in the Corporation, who have to ensure that the systems work smoothly in close cooperation and coordination with each other to realise the true intent and spirit within the framework of the defined contours of autonomy and accountability envisaged under the Act.

Vol. 8, issue 5 | AUGUST | 2014

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