India’s private radio players, through industry body Association of Radio Operators for India (AROI), have urged the country’s telecom regulator -Telecom Regulatory Authority of India (TRAI), not to recommend allowing not-for-profit companies to run community radios.

According to them, granting permission to not-for-profit companies falling under Section 8 of Companies Act, 2013, would come at a financial loss to the exchequer as such companies would become eligible for benefits like reduced license fee, access to spectrum without auction, lower spectrum usage charges, among others, thereby reducing revenue for the government and giving strong competition to small community radios.

Presently there are 356 community radio stations operational in the country, broadcasting content that is of specific interest to communities in a particular geography. Current rules permit only civil society and voluntary organisations, educational institutes, state agriculture universities, registered societies and autonomous bodies, and public charitable trusts are to operate community radio stations.

In July, following a suggestion from the Ministry of Information and Broadcasting, TRAI had sought comments from stakeholders on whether not-for-profit companies under Section 8 should be allowed to set up community radio stations.

Section 8 of the Companies Act includes companies formed to promote commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object. Such companies also intend to apply their profits or other income to promote their objectives.

“Section 8 companies are set up by large organisations, and through community radio stations they will get a back door entry to commercial radio broadcasts at negligible costs,” said Uday Chawla, Secretary General, AROI, during an open-house discussion conducted by Trai on the subject.

“If I am running a larger organisation, I will be able to create an NGO and take a community radio licence … then why is there a need for auction of spectrum by the government,” he said.

“Basic purpose for community radios is to cater to people in a particular geography. However, Section 8 companies are thematic and incorporated for special purposes, therefore, they may not be able to serve specific interest of a community and should not be allowed,” said Prashant Ramdas, legal head at Entertainment Network (India), operator of Mirchi FM.

While certain levies for community radios are kept at a bare minimum, the industry has been struggling for a sustainable business model due to fewer advertisements and limited access.

“Community radio as an industry is struggling. We want the government to provide us financial support,” said B S Panwar, president, Community Radio Association of India. The association, along with community radio station operators, has urged the Centre to provide them annual grants and ask state governments to use community radios as a preferred medium to advertise their policies.