Regulatory environment for news media in India.

“Freedom of the press is a precious privilege that no country can forego”

— Mahatma Gandhi.


India is the largest democracy in the world with a population of 1.2 billion people and 814 million eligible voters (Chouhan, 2014). The news media, often called the fourth pillar of democracy, plays a seminal role in informing the citizens and holding governments accountable (European Commission, 2009).

This paper identifies regulations that aim to strengthen press freedom and encourage plurality of views - conditions that are necessary for informed debate to take place in a democracy. The paper is divided into four sections; Section I gives an overview of the economic trends in Indian news media. It looks at print media circulation and readership numbers, share of newspapers in different languages, advertising revenues and prospects of future growth with the rise of digital media.

Section II explores some of the challenges faced by the Indian news media. Death threats and physical harm to journalists, and defamation cases aimed at financially crippling the media are being used to silence dissenting voices. Further, the spurt in political and corporate ownership of media houses raises serious questions about how free and fearless Indian media can be in its scrutiny of businesses and stock markets.

While outside forces pose challenges to the media, a great deal of inward reflection is required on the question of media ethics. Practices like paid news, financial treaties with advertisers and a recently unearthed lobbying scandal involving politicians, corporates and senior journalists have cast aspersions on the credibility of news media.

Section III discusses the current regulations and how inadequate the current statutory and self- regulatory institutions are in ensuring compliance with news media regulations. It outlines the laws pertaining to defamation and protection of sources and examines media ownership with its impact on plurality of views. It highlights how the current anti-trust framework under the Competition Act fails to factor in the threat to plurality of views due to mergers and acquisitions in the news media industry.

Section IV discusses the norms required for regulating media ownership with a close look at several shareholding and ownership models that could help preserve plurality of views. It talks about using the Hirfindahl Hirshman Index to study market concentration and proposes amendments in existing statutes to prevent the misuse of defamation laws. Finally, it looks at strengthening media regulators with the aim of encouraging plurality of views and responsible reporting.


Print journalism in India is thriving and defying the trend of decline seen in Europe and the United States (The Economist 2010). Indian print media witnessed a growth of 7.6 percent in the year 2015 and revenues from circulation grew at CAGR of 7.1 percent between 2010-15. While revenues from print advertising have shown a decline for newspapers in Germany, France and the United States (Cagé and Goldhammer 2016), revenue from advertising that accounts for 66 percent of the total revenues, grew at a cumulative average growth rate of 8.5 percent between 2010-15 in India (KPMG-FICCI 2016).

The print media market in India is segmented into several languages with Hindi and vernacular publications accounting for 40 per cent and 47 per cent of the total registered print publications (KPMG-FICCI 2016). English news media is mostly restricted to metro cities and takes a larger share of advertising revenues as compared to Hindi and vernacular. However, with the GDP expected to grow around 7.5 percent in the coming years (International Monetary Fund 2016), demand for goods and services in smaller towns and cities is expected to increase. This has led to the launch of local editions of newspapers in these cities. In 2015, Dainik Bhaskar, the third largest Hindi daily in the country expanded its reach to smaller towns with newer editions, in a move that is designed to provide targeted reach to advertisers (The Economic Times 2015).

The transition to digital platforms is underway but it is slow and print will continue to be the dominant medium for some time (KPMG-FICCI, 2016). The internet penetration is still around 27 percent as compared to 87 percent in US and 46 percent in China which means that transition to digital media will take time as telecom infrastructure is added (KPMG – IAMAI, 2015). Recent investments by Telecom companies in 4G technology and a significant decline in cost of Internet services is seen as a driving force for the expansion of digital media. Even though digital news may have reduced readership by one or two people per household but newspaper circulation continues to grow (KPMG-FICCI, 2016).


Safety of Journalists.

In 2016, India ranked 133 out of 180 countries in press freedom as per Reporters Without Borders (Reporters Without Borders 2016). The Press Council of India report on ‘Safety of Journalists’ states that 80 journalists have been killed in India since 1990, with conviction in only one case so far. The Press Council has termed this ‘alarming’ (Press Council of India, 2015).

Criminal Defamation – a tool to silence the press.

Criminal defamation defined under Section 499 of the Indian Penal Code permits any person who has suffered damage in reputation on action of others to sue for defamation (Indian Penal Code 1860). In 2015, around ten defamation cases were filed against media organisations by corporates and politicians alike (Jha, 2015). The Essar Group, a multi business conglomerate filed a defamation suit of USD 40 million against The Caravan, a magazine known for its investigative journalism, when it published a 14,000-word article that exposed corrupt practices followed by the company to gain favours from officials (Ramanathan, 2015). While The Caravan has decided to contest the case in courts, such threats may discourage other media organisations to investigate stories around wrong doing by big companies or individuals.

Image 1: Caravan Magazine sued by a corporate house. Source:

These lawsuits are an attempt to scuttle voice of the press and cripple them financially in the same way as Gawker in the US (Yuhas, 2016). Politicians are not far behind; Tamil Nadu Chief Minister filed 213 defamation cases against her opponents and media outlets for using ‘derogatory’ remarks against her in the past five years. Anything ranging from writing about her health or vacations has been termed ‘derogatory’ and used as a pretext to harass political opponents and the press (Sinha, 2016).

Tycoons and Politicians in Media.

For India’s industrialists and business tycoons, news media is a means to access power and control public discourse (Gupta, 2013). Reliance Industries Limited (RIL), India’s biggest privately owned company also owns Network 18, India’s largest media organization (Thakurta, 2014). It is not surprising that authors of the book, ‘Gas Wars: Crony Capitalism and the Ambanis’ that investigated into Reliance’s oil interests were served with defamation notices and news coverage around the book was virtually blacked out by the Indian media (Thakurta, The Ambanis step up pressure, 2014).

Image 2: Network 18 ownership before Reliance took complete control. Source:

Ownership of news media by politicians, both print and television along with control of cable and satellite TV operations in several states has meant that the newspapers and TV news channels have become mouthpieces for their political masters (Parthasarathy, 2013). In Tamil Nadu, all major political parties own television channels that routinely broadcast news showing their owners in positive light, thus biasing public opinion. Almost all-major Indian media outlets have some form of political or corporate influence (News Laundry 2014).

Media Ethics – Paid News, Corporate Treaties & Lobbying.

However, it is not only the corporates and politicians who can be accused of throttling media freedom, the press is equally to blame for its shady dealings in the form of ‘paid news’ and ‘corporate treatise’. Paid news is defined as “any news or analysis appearing in any media (Print & Electronic) for a price in cash or kind as consideration” (Press Council of India, 2010).

The Parliamentary Standing Committee on Information Technology, in its 47th report expressed deep concern over the fact that “certain sections of the media have started receiving monetary or other benefits for publishing or broadcasting in favour of individuals/organisations/corporate entities” and noted that paid news is “unduly influencing the financial/stock/real estate market, health, industry and influencing public opinion in election process.” Their investigation revealed that paid news is “not limited to corruption of individual journalists instead has become complex and ‘organized’ involving multiple players like journalists, managers/owners of media companies, corporations, public relations firms/advertising agencies and some sections of the political class.” (Parliament of India, Standing Committee on Information Technology, 2013).

The Securities and Exchange Board of India (SEBI) expressed concern over “many media groups entering into agreements, called “Private Treaties” with companies which are listed or coming out with a public offer for stake in the company and in return providing media coverage through advertisements, news reports, editorials etc.” These treaties give company shares to media outlets in return for brand building and advertisement through print and broadcast media (Telecom Regulatory Authority of India, 2014).

At a lecture titled “Pay-to-print”: How Media Corruption Undermines Indian Democracy, delivered at University of California, Berkeley, P Sainath highlighted that, “the media are no longer a bunch of pro-corporate newspapers. They are the corporates. They are the big business. ... The media-houses have a structural compulsion to lie” (Sainath, 2011).

However, the final nail in the coffin for news media credibility came when the nexus between the media, corporates and journalists was exposed with the appearance of phone recordings of senior editors, acting as intermediaries between industrialists and politicians to fix ministerial positions in the government (Outlook Magazine, 2010). The scandal was a call for introspection for Indian media lest it loses all credibility in the eyes of the public (Jebaraj, 2011).

The following section examines as to how and why the existing architecture of media regulation in India has failed in preventing the challenges discussed above.


Press Council of India.

The Press Council of India was established in 1966 as a statutory body with quasi-judicial powers to act as a watchdog for print media (Press Council of India, n.d.). The central idea in India’s media regulation is that self-regulation works best, however the commercialization of news media has meant that objectivity in reporting has suffered significantly (Telecom Regulatory Authority of India, 2014). In such a scenario, the Press Council is at best, a toothless tiger. The Press Council Act of 1978 only empowers the Council to “warn, admonish or censure the newspaper, the news agency, the editor or the journalist, as the case may be” for any violation of journalistic ethics (Press Council Act, 1978). The lack of punitive power means that the Press Council “cannot levy fines or order the withdrawal of advertisements by government agencies, leave alone place errant journalists behind bars”, which is a serious limitation to its ability to regulate the media, according to a former member of the Press Council (Telecom Regulatory Authority of India 2014).

News Broadcasting Standards Authority.

In the case of television
news, the News Broadcasting Standards Authority (NBSA) looks into violation of code of ethics laid out by the News Broadcasters Association (NBA). However, the problem with this self-regulatory body is that its membership is voluntary and ‘out of 135 news channels in the country, only 28 news broadcasters owning 57 news channels are members of the NBA’ (Telecom Regulatory Authority of India, 2014). In comparison to the Press Council of India the News Broadcasting Standards Authority (NBSA), can ‘warn, admonish, censure, express disapproval and fine the broadcaster a sum up to Rs. 1 lakh for violation of the Code’ (PRS Legislative Research, 2011). However, a large number of television news channels continue to be beyond the ambit of any regulation by virtue of not being part of NBA.

Indian Penal Code – Criminal Defamation Laws.

The defamation law was enacted in 1860 and has witnessed few changes since. Tathagata Satpathy, a Member of Parliament has been leading a campaign to make the defamation laws more progressive. He argued that, “It is a lack of clarity that often leads to misuse of defamation laws by using them as a harassment tool. The ultimate result is that this restricts speech” (Satpathy, 2016). After months of public consultations, he has authored a Private Member Bill that will be introduced in Parliament to change the law. However, Private Member Bills are only symbolic in nature as they rarely get passed (The Times of India, 2015).

Protection of Sources.

The protection of identity of sources used by the journalists is an important element in how journalists bring out the truth before the people. However, in India, there are no statutory rights accorded to journalists to protect their sources (Mitta, 2012). In fact, in a court of law, a journalist may be held in contempt of Court for not disclosing her sources. This issue has been examined by the Law Commission report on ‘Disclosure Of Sources of Information By Mass Media’ and the commission favours a law under which, “the court before which protection is claimed may be given a discretion to uphold or reject the request for protection (the decision to be arrived at in each individual case)” in contrast to an absolute privilege against disclosure being granted. The Law Commission suggests that the courts must “balance the need to protect confidentiality of the source of the information (or the information itself, if so decided) against :--(i) the interest of justice and (ii) the demands of national security, prevention of disorder and crime” (Law Commission of India, 1983).

Media Ownership and Free Markets.

News media ownership is a contentious issue that has been examined by the Telecom Regulatory Authority of India from the angle of press plurality. At present there are no regulations that impose limits on i) cross-media ownership, ii) investment in news media by non-media organisations or iii) news media organisations diversifying into non-media businesses. In fact, the Competition Commission of India that regulates markets to ensure that they remain competitive is blind to need for ‘plurality of views’ in the news media industry while ratifying mergers. It is argued “that the media cannot, and should not, be bracketed with general commodities and services. The market for ideas is very different from that for, say, shoes or biscuits.” (Telecom Regulatory Authority of India, 2014).

However, proponents of free markets continue to argue that government should not interfere in the market and let the media self-regulate. This principle engenders from Justice Holmes J.’s dissent in Abrams v. United States in 1919, which laid the foundation of market place of ideas theory. In his dissent note he upheld that “the best test of truth is the power of the thought to get itself accepted in the competition of the market” (US Supreme Court 1919). However, it can be argued that marketplace of ideas can also suffer from market failure as it has in the case of the news media by failing to provide unbiased news (Brietzke, 1997). In the interest of democracy, it is essential that the exchange of ideas take place in an uninhibited manner where all citizens can access information free of bias and prejudice. This consideration should be above and beyond the considerations of free markets because a jaundiced press nibbles at the foundation of democracy (Singh and Gupta, 2014). The following section presents a regulatory framework for news media in India.


This section defines the term ownership, a criterion for cross media ownership and the process of calculation of market share in print and broadcast media. Then it discusses the use of Herfindah l Index (HHI) for calculating market concentration and fix thresholds values for the index. In the interest of transparency, self-disclosure norms for the news media have been detailed. The section concludes with proposals to strengthen the existing regulators, reform defamation laws and suggest the enactment of a law for protection of journalistic sources.

Ownership – Definition.

The Telecom Regulatory Authority of India (TRAI) has proposed that an “entity (E1) is said to ‘Control’ another entity (E2) and the business decisions thereby taken, if E1, directly or indirectly through associate companies, subsidiaries and/or relatives: (a) owns at least twenty per cent of total share capital of E2. (b) Exercises de jure control by means of: (i) having not less than fifty per cent of voting rights in E2; Or 
(ii) appointing more than fifty per cent of the members of the board of 
directors in E2; or 
(iii) controlling the management of E2 and appointment of key managerial 
personnel (iv) Provided that if E1 advances a loan to E2 that constitutes not less than - [51%] of the book value of the total assets of E2, E1 will be deemed to ‘control’ E2”. (Telecom Regulatory Authority of India 2014)

Cross-Media Ownership and Relevant Markets.

Print and television are two segments through which news is disseminated (private radio channels are not allowed to broadcast news). Given that states are organized along linguistic lines, it is recommended that for the purpose of cross media ownership relevant markets should be defined as per the language which is spoken by majority of the people in the state. For instance, in the case of West Bengal where Bengali is the main language, the same entity should not be allowed to enter both print and television in the interest of plurality of views, as discussed before. However, a Bengali newspaper owner could be allowed to operate an Oriya TV channel in the state of Odisha. (Telecom Regulatory Authority of India, 2014).

Computation of Market Share.

It is suggested that a new metric for calculation of market share be developed for the print as well as the television news media as the existing rules under the Competition Act have been found to be inadequate for the media sector.

For television a combination of reach and volume of consumption could be used to compute market shares. In the case of print it is suggested to use reach of the newspaper as a metric to determine market share (Telecom Regulatory Authority of India, 2014).

For Television:

GRP* - Gross Rating Point (Business Dictionary 2016)

For Newspapers:

Determining Market Concentration.

The Herfindahl Hirschman Index (HHI) should be used for calculation of market concentration in relevant markets. The Telecom Regulatory Authority of India recommends a rule that states “if the television as well as newspaper markets are concentrated (HHI> 1800 in each), then, an entity contributing more than 1000 to the HHI of the television market, cannot contribute more than 1000 towards HHI in the newspaper market as well, and vice-versa. If it does so, it will have to dilute its control” (Telecom Regulatory Authority of India, 2014).

Annual Disclosures – A move towards transparency.

At present the ownership and investment structure of media entities is governed by the Companies Act and does not meet the higher transparency standards required for the news media sector. Hence media companies should publicly disclose: “(i) Interests of entities, direct and indirect, having shareholding beyond 
5% in the media entity under consideration, in other media 
entities/companies (ii) Shareholders Agreements, Loan Agreements and any other contract/ 
agreement (iii) Details of key executives and Board of Directors of the entity. (iv) Details of loans made by and to the entity”. This information will allow the public to gauge if the news oraganisation is unbiased or not.

Ownership restrictions.

While public disclosure of ownership structure in news media organisations provides information to the people regarding the fairness of the organization and the possible biases that may creep in its reporting at the behest of its owners, this may be insufficient as corporate ownership can be structured in complex manners through subsidiary and front companies that may be hard for the people to link to the owners. Thus government should consider setting up threshold limits to ownership of news media by non-media entities. (Telecom Regulatory Authority of India, 2014)

Regulatory Bodies.

The Competition Commission of India should be empowered to include the market share calculation as discussed above to decide on market concentration in news media sector while approving mergers and acquisitions. This will require amendment of the Competition Act.

The Press Council of India and the News Broadcasters association should be merged and a single news media regulator, independent of government control should be established. This regulator should be given a quasi-judicial status with enhanced punitive powers to regulate breach of code of media ethics (Press Council of India, 2010).

Amendments to Defamation Laws and Enactment of Sources Protection Rules.

As discussed before, criminal defamation laws are being misused in India to scuttle journalistic independence. The Speech Bill, to be introduced by Member of Parliament, Mr. Tathagata Satpathy is a step in the right direction and it should be discussed by Parliament to amend archaic and draconian defamation laws of the Indian Penal Code. (Satpathy, 2016). The government should enact the law commission recommendation to provide for protection of sources to protect journalists from harassment by law enforcement agencies.

This paper has touched upon a section of issues that hinder press freedom in India, discussed the failures of existing regulatory mechanisms and has proposed a regulatory framework for strengthening press freedom.

Note: This is paper has not considered the issue of media subsidies for several considerations that include i) the strong circulation and advertising revenues for papers in India that allow them to be financially independent (generally speaking) ii) considerations of brevity as an analysis of media subsidies in India, which varies from state to state will be a complete paper on its own. The paper is not positioned from the view of a regulator because multiple regulators (CCI, PCI, NBSA, Parliament) exist in India. However, an overall regulatory architecture is proposed.


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Financial and Circulation figures related to Indian Media.

Figure 1: Print Media Financials and Growth Prospects (KPMG-FICCI 2016).

Figure 2: Print Media Language Market Mix (KPMG-FICCI 2016).

Figure 3: Circulation of Print Media in India (KPMG-FICCI 2016).

Figure 4: Ownership pattern of print publications in India (KPMG-FICCI 2016).

Figure 5: Readership numbers of top 10 publications in India (KPMG-FICCI 2016).

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