Union Cabinet Approves 730 New Private FM Radio Channels in 234 Cities

The Union Cabinet, led by Prime Minister Narendra Modi, has recently approved a major expansion in India's FM radio sector. This new initiative will see the establishment of 730 private FM radio channels across 234 cities, marking a significant boost in the country's media landscape. With an estimated reserve price of Rs 784.87 crore, these channels will be allocated through an e-auction process.

The expansion will significantly increase radio coverage in numerous cities, including many in aspirational districts and areas affected by Left Wing Extremist (LWE) activities. The move is expected to strengthen government outreach and provide a platform for diverse local voices.

In a bid to support the sector’s growth, the Cabinet has approved a revised Annual License Fee (ALF). This fee will now be set at 4% of the gross revenue, excluding GST, applicable to the new cities and towns. This adjustment contrasts with the previous structure under Phase III, which included a higher license fee based on 2.5% of the non-refundable one-time entry fee (NOTEF) for each city.

The Telecom Regulatory Authority of India (TRAI) had previously recommended separating ALF from NOTEF to address financial strains caused by the pandemic. This recommendation was aimed at ensuring that the license fee does not exceed the revenue generated by many stations.

Under the Phase III policy, the Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) limits for private FM radio companies have been increased from 20% to 26%. Additionally, private radio channels are now permitted to broadcast news bulletins from All India Radio in an unaltered form.

However, while private FM channels are allowed to broadcast certain types of information such as sports events, traffic updates, weather, and public announcements, the policy still restricts them from broadcasting independent news. TRAI's recommendation in September to allow up to 10 minutes of news per hour remains unimplemented, although it continues to be a topic of discussion. This expansion aligns with the government's vision of enhancing media accessibility and fostering regional content creation.