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Small is no longer beautiful
DAVP, RNI and PIB all coming under the Ministry of I&B, have offices spread over the country. It should not be difficult to check the existence of a publication, its regularity, its content, and its print order by a visit to the declared printing press

Among the powers enjoyed by a party in governance the one relating to patronage extended to media is subject to much abuse. Journalists aligned to the party in power are the main beneficiaries. They get better access to policymakers, some get plum posts and the more privileged amongst them get appointed as members of the Rajya Sabha.

Even a more powerful tool is the discretionary release of government’s advertisements. While the Centre set up the Directorate of Advertisement & Visual Publicity (DAVP) in 1955 and has formulated norms, these have been subjected to a great deal of manipulation. There has also been corruption seeping into the system.


DAVP the large advertiser

The norms stipulate 50 per cent allocation to large newspapers, 35 per cent to medium and 15 per cent to small newspapers.

DAVP has a fairly large budget for display advertisements. For 2014-15, this was estimated at Rs 298 crore and in the previous year Rs 373 crore. The UPA government lavished large newspapers with advertisements of its own leaders like Jawaharlal Nehru, Indira Gandhi and Rajiv Gandhi on their birth and death anniversaries.

The Modi government has been attempting to streamline the DAVP releases cutting down on the birthday and death anniversary remembrances. One also noticed a drastic curtailment of advertising by the public sector corporations, banks and other government-controlled institutions. The recent judgment of the Supreme Court directing the government not to publish photographs, except those of the President, Prime Minister and Chief Justice, appears a dampener on the interests of other Ministers at the Centre and Chief Ministers of the state.

With the economy in the downturn and with advertising by corporates not expanding, the DAVP’s largesse had been a big source of comfort to large newspapers.  Since DAVP is the largest buyer of advertisement space, it has a clout to fix the rate through a rate structure committee. Large and medium newspapers constantly endeavour through the Indian Newspaper Society to get higher rate for government’s advertising.


A one-sided report…

The Hindu in its report dated 28 May 2015 on Newspapers only ‘on paper’ make a killing from government advertisements, focused on institutionalised

corruption at DAVP. A number of issues arise out of that report:

•    The DAVP has been releasing

Government of India advertisements and in recent months, one sees large regular advertisements from different government departments released for the print medium.

•    There is corruption in regard to the selection of newspapers and

periodicals. Over time, the DAVP has become unwieldy and is not taking advantage of technology to deal with the explosive growth in the number of newspapers (close to 100,000 registered with RNI), which look for government advertisements. Hardly a fifth of these submit the mandatory annual statement; of these only 40 per cent get into the privileged DAVP list of advertisers.

•    The system of selection of newspapers by DAVP is tardy and opaque. The fixation of rate is so irrational that keeps a number of honest publications away from DAVP.

The news report is erroneous: the share of large newspapers in DAVP’s ad budget is 50 per cent and not 30 per cent as mentioned. For several large newspapers, in the present context of economic slowdown and acute competition from TV and the social media, advertisements from the DAVP and from the state governments, form a significant chunk of their revenue.

With the dearth of quality small papers and shortage of quality manpower at DAVP to assess their content, the 15 per cent meant for small papers ends up reaching the corrupt few that are politically well-connected or through corrupt deals.


Keeping check is not difficult

The government has the machinery to check the existence, periodicity and circulation.  DAVP, RNI and PIB all coming under the Ministry of I&B, have offices spread over the country. It should not be difficult for these to check the  existence of a publication, its regularity, content and its print order by a visit to the declared

printing press. It is also mandatory to send copies of every issue to designated central libraries and the RNI.  

The functioning of the RNI is also bizarre. The report mentions that of the 99,660 registered newspapers, only 19,755 submit annual statements duly authenticated for the number of days published and for their circulation. Why can’t action be taken against the papers failing to submit the statement or those that furnish incorrect figures? The chartered accountants concerned can be made accountable.


Irrational rate fixing...

Let me share my experience as the publisher of a business magazine for over 47 years. In the formative years, there used to be a flourish of DAVP advertisements. For a few decades, Industrial Economist (IE) was under the DAVP list. Then started the era of pervasive corruption that kept  out several small publications, especially those far away from Delhi. Post-2005 entered another irrationality relating to rate fixation. I cite an instance: if for a large newspaper with a circulation of 10 lakh the rate for 100 column centimeters is Rs 4 lakh, for a small publication with a circulation of 10,000 copies, the rate is fixed pro-rata at Rs 4000. This meagre amount cannot even cover the cost of paper and printing.

Look at the differences in cost of production for a  large paper and a small one.

•    Glazed newsprint used by a small paper has to be imported at a price nearly double that of standard newsprint incurred by a large daily that gets the advantage of volume order. Adding the cost of warehousing, conversion into sheets, transportation and finance, it becomes three times more expensive for a small paper.

•    Printing cost for small runs are more expensive. For instance, the cost differential for running 10,000 copies in a sheet-fed machine and a giant rotary press can vary 1:25 in favour of the rotary. A 40 page daily edition of Times of India is priced at Rs 3; or 7.5 paise per page; or less than 2 paise per page of IE size. For IE the price per page works out to 45 paise. The cost is 1:22 in favour of the rotary.  Such difference in costs can be observed across the entire spectrum from word processing, pagination to the pre-press stage.

•    For specialised publications, recruitment and retention of qualified hands is again a more difficult and more expensive exercise. Often after getting well trained, they are lost to the large newspapers!

•    While large newspapers have their own properties acquired at historical costs, small papers often have to incur much higher cost on infrastructure.

Finance costs from banks and other sources are  a fraction of those available for large papers.


System keeps the honest away…

Small papers find the rate offered by DAVP so unviable that they keep away from DAVP. Is it then a surprise that the ‘voucher-copy publishers’ or the non-existent publications that thrive on political patronage and bribe, alone can be in the DAVP list of small papers?

The mortality rate of small and specialised publications is high. When IE was launched in early 1968, it had well-established and illustrious contemporaries, regionally well distributed –

Capital in Kolkata, Commerce in Mumbai and Eastern Economist in Delhi; all the three were owned by large industry groups and had been in existence for decades. These presented well-researched articles on the economy and gained respect among policy makers. But these folded up in quick time. Keeping abreast of technology, changing needs and frugal management, IE has survived.

Large English newspapers are predominantly and increasingly dependent on advertisements. The share of ads in total revenue of these had increased over time from around 30 per cent in the 1960s to over 90 per cent today. It is an unequal competition for small publications with meagre resources to compete with these to garner ads. The government policy was specifically formulated to lend support to small papers reserving 15 per cent of DAVP ads.

I agree with the report on the extensive corruption and malpractices in distributing DAVP ads to smaller publications. The solution lies in correcting these and not to throw the baby along with bath water.


Large newspapers not paragons of virtue

The report gives the impression that large papers are paragons of virtue. But not all of them are.  I suggest a few instances:

For several years in the 1960s and 1970s several large multi-edition newspapers were charged with inflating circulation figures for importing newsprint much higher than their entitlements and for black marketing this. The Fact Finding Committee on newspapers commented on a large newspaper chain with multi-editions, that even God cannot unravel its accounts.

Most large newspapers continue to belong to large industrial houses. Post-liberalisation, the nexus between media mughals and politicians thickened. Many media houses have expanded into other businesses like power, coal, liquor,... The cover-jacket ads published by large newspapers, now seen in profuse, offer handsome discounts in rates; some even offer equity deals to entice small businesses to large scale advertising.

Effective lobbying by large newspapers helps them get a splurge of ads on special occasions like elections or anniversaries of governance at the Centre and states. During 2014 general elections , department after department at the Centre

lavished large dailies with large-sized ads in profuse. The small papers are mostly not in the radar for such advertisements.

When was the last time one came across a critical analysis of a large advertiser in the corporate sector except when the companies are in the decline like Satyam Computers, Saradha Chit Fund or Sahara?  Smaller newspapers and specialised magazines do this with greater concern.

Though small, IE had taken several causes that safeguarded the rights of the entire industry. It defended a case in Madras High Court for 11 years to establish the right of the media to be critical of malpractices and bad management by a unit of a large industrial group of Chennai. The judgment, if turned adverse to us, would have prevented the entire media to be critical of such deeds.  IE successfully battled out the cause of press freedom.

Look at the price war between TOI and Hindustan Times: the price was slashed initially from Rs 2 to Rs 1.50 and subsequently to a rupee per copy. Look at the ridiculous consequence: with the commission to the agent guaranteed at 50 paise and the raddi value around 58 paise, the agents made merry by not bothering to sell the copies to a genuine buyer. Both the newspapers massively increased their print order and claims on circulation. Audit Bureau Circulation and readership surveys had lost their meaning.

The Hindu exposed the ‘paid news’ racket indulged by several large newspapers during the 2009 elections. This was of considerable help in correcting this practice in the 2014 elections. The several aspects of malpractices attributed to small newspapers in The  Hindu report were there in a rich measure in the “paid news” racket. And the leader, TOI, led this with gay abandon!


Small but effective...

Since 1973, IE has been attending and covering the annual Economic Editors’ Conferences inaugurated by the finance minister. This opportunity was well utilised to present the impact of economic policies, especially on the southern region.

IE has produced comprehensive special issues on the economies of several states interviewing the chief ministers and leaders from different sectors. These included Andhra Pradesh, Gujarat, Karnataka, Odisha and Punjab.

The governments of France, Germany, UK, USA and the FAO had invited IE to look closely at their projects and their economic policies. IE also covered the President Bush-Prime Minister Manmohan Singh meeting at Washington in 2005 and was part of the prime minister’s media delegation to England and Finland in 2006.

Small papers endeavour to expand their utility in several other directions and not just through their modest circulation. IE instituted the annual award for business excellence for a southern corporate, presented several luminaries on public lectures on current and emerging topics.

A word about the Indian Newspaper Society that celebrated its platinum jubilee last year: the INS seems to be of, by and for large newspapers. In 40 years of my association as a member, I did not come across any great concern exhibited by INS for the small papers that form a sizeable portion of their membership.

Like in any society, black sheep and corrupt are well distributed across small, medium and large papers. The need is to weed out the bad practices and nurture the best.  Small, specialised publications are an endangered species. They are a good source for well-researched, well-analysed features presented without bias and fear. Treat them with concern.

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IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
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