Pre-poll bonanza to media: 24% hike in Government advertising rates

Business Desk
The Ministry of Information & Broadcasting has enhanced the existing rates for the DAVP advertisements by 24 per cent. The revised rates would be applicable for the advertisements released on or after September 01, 2008. All categories of newspapers and periodicals empanelled with DAVP have been covered under the revised rates.

It is strange that during the time of recession in global economy and curtailing of costs, Government has announced windfall bonanza for media. It is a strange step since it is done in middle of the financial year. Most media plans by government organizations would have been approved and orders would have been placed. A rise in rates now means that government bodies will have to shell out a hefty amount for placing advertisements. This rise is truely not justified since most media tends to give non-premium positions to government ads.

Government claimed that the revision of advertisement rates was under consideration of the Ministry on the demand of Indian Newspapers Society (INS) for increased rates due to rising newsprint and other costs. The Ministry had taken up the matter with the Ministry of Finance, which has now given its concurrence for the enhancement.

A press release by the ministry said that this decision would benefit more than 4,000 newspapers and periodicals. The small and medium newspapers, among others, would however be benefiting most as the percentage of advertisements to be released to these categories of newspapers was increased earlier. The percentage of advertisements for small newspapers went up from 10 to 15 per cent and for medium newspapers from 30 to 35 per cent in the changed policy adopted by the Ministry on October 02, 2007.

However, this will also mean that Congress government can expect more favourable coverage from media entities across the country before elections. It will do nothing to help severe inflation.