New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the establishment of 730 new private radio channels in 234 new cities under the Private FM Radio Phase III Policy on Tuesday. The new channels will be e-auctioned with an estimated reserve price of Rs. 784.87 crore. The Cabinet also sanctioned a revised Annual License Fee (ALF) for FM channels at four percent of the gross revenue, excluding GST. This new fee structure applies to the 234 new cities and towns, according to Union Information and Broadcasting Minister Ashwini Vaishnaw.

The government highlighted that many of the approved cities and towns are in aspirational districts and left-wing extremist (LWE) affected areas, aiming to enhance government outreach in these regions. Previously, radio channels auctioned under Phase III had a higher license fee, set at 4% of gross revenue or 2.5% of the bid price as a non-refundable one-time entry fee (NOTEF). In response to industry feedback and TRAI’s recommendations, the ALF has now been delinked from the NOTEF. This change addresses concerns that the NOTEF-based fee had exceeded 100% of the revenue earned by many stations early in FY21.

Phase III also includes increased Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) limits for private FM radio companies from 20% to 26%. While private channels are permitted to broadcast news bulletins from All India Radio in an unaltered form, they are otherwise restricted from broadcasting news. TRAI had recommended in September allowing private channels to broadcast up to 10 minutes of news per hour and maintaining active FM radio receivers in mobile phones.

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