44 Major Controls, Management, Ownership and Financial Structure of Indian Newspaper

From the point of view of periodicity, there are dailies, weeklies, monthlies and very few fortnightlies and bi-weeklies. From the point of view of purpose, all these cover a vast range of activity. It is, therefore, difficult to examine this complicated structure from any one angle. This memorandum will deal with it generally and illustratively and not exhaustively.

2. Purely proprietary concerns own many of the small daily newspapers, weeklies and monthlies. There are the single unit papers like the Hindu and the Mail of Madras, which have no sister papers or editions outside Madras. These are mostly private limited concerns. Some of these grew from small beginnings.

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A few individuals or the members of a family joined together and started the paper with a small printing press. If income was small, so also was expenditure. With the spread of education, and political consciousness the papers began to build larger circulations, the organisation was modernised, and the financial structure underwent a change.

Private limited companies came into being, the shareholders of which were members of the same family. These invested no capital whatsoever in the shape of cash money but had shares assigned to them by mutual adjustment or agreement.

3. Next comes the group of papers like the Bombay Chronicle, the Bombay Samachar and the Bombay Sentinel group in Bombay, the Indian Nation and Aryavarta group in Patna, the National Herald, Navjivan and Quami Awaz in Lucknow.

4. The fourth class is divisible into two parts. The Amrita Bazar Patrika, the Hindustan Standard and the Statesman, all Calcutta papers have duplicate editions in other centres, the first in Allahabad and other two in Delhi.

The Patrika and the Standard have sister Bengali papers in Calcutta. The Times of India has two editions, one in Bombay and the other in Delhi, (a third is about to be brought out in Calcutta) and a Hindi paper at all the three places besides a Bengali daily already published in Calcutta.

It has also a number of smaller periodicals around it at Bombay, and the Evening News of India, which is an evening paper.

The Vishwamitra, a Hindi daily, comes out from five places under the same name, while the Milap, as Urdu daily, comes out from three places under the same name and has also a Hindi edition at Jullundur and at Hyderabad. There may be several others in this class.

5. The second sub-group in the fourth class is the Goenka group and the Birla group, which have two or more papers at each centre and are linked up with multiple units or groups elsewhere.

6. In this part of the memorandum attention is given to the four classes of newspapers. The problem of periodicals is dealt with separately.

7. The medium-sized English language papers represented by the Pioneer and National Herald of Lucknow are six pages on weekdays and eight on Sundays, while the medium class Indian language papers are four pages on week-days and six or eight on Sundays. In this class may be included such newspapers as the Nagpur Times, the Assam Tribune, the Deccan Herald (Bangalore).

Their capital is modest, their income sizeable, their staff just adequate. Before the war such of them as were in existence were not doing well; their position improved after the war. The present economic difficulty is hitting this class hard.

The main purpose of most of these papers is to serve provincial needs while providing national and international news and comment. They are not free from their geographical limitations. Their circulations are limited; their advertisement revenue is not high.

8. The small-size newspapers, daily and weekly, form the majority in this country. The normal size is four pages for a daily and a few small pages for a weekly. Financially they are often in difficulties, the single proprietor or his family or group bears the brunt from month to month. Their equipment is inadequate.

Their revenue is poor, their staff is over-worked, their advertisement revenue is precarious, and their circulation a few hundreds and they cannot even afford to get the minimum news services. Some papers of this class raise money often by obscure means. The picture of Hindi journalism given in the U.P. Inquiry Committee’s report merits study.

9. Unlike the average medium-size paper, this class is inclined to be partisan, perhaps because it feels it has no other means of survival. Some of the worst features of Indian journalism, personal and communal, are to be found at this level.

The staff is badly paid and untrained. The difficulties of these papers principally arise from the attempt to compete with the big papers in a sphere which is not theirs, instead of devoting greater attention to intensive coverage of local news and local problems.

10. There are the trust papers, that is, newspapers or weeklies owned by trusts. The Tribune of Ambala, the Hitavada of Nagpur, the Pratap of Kanpur and the Janmabhoomi group in Bombay fall in this class. Their affairs require deep study.

11. Papers like the Patrika, the Hindustan Standard and the Vishwamitra, published simultaneously from more than one centre, are mainly owned by what may be called newspaper families or allies—persons whose main interests are in the newspaper industry.

Although the duplicate edition of any such paper depends upon the reputation and efficiency of the home edition, it is the home edition that suffers most.

Generally the capital of these subsidiary papers or editions is met from the revenues of the principal papers, with the result that their reserve funds dwindle, their staffs lose, bonus and increments, the state loses its share of money by taxation, the office staff, the advertisement personnel, the correspondents and the editorial writers have to do work for two editions or more without any extra remuneration worth mentioning. For example, a correspondent covering the Capital for a Calcutta paper in this class has to be on the lookout for news from the Allahabad or Bombay angle also, as soon as the principal paper starts an edition in these two places.

12. We have already pointed out that such a development affects workmen on the principal paper very badly as it absorbs the entire available surplus. It provides sinecures and allowances to members of the proprietors’ or directors’ families.

But its effect on the working conditions in areas where it is simultaneously published is still worse. Such a paper with less expenditure on news services, correspondents, and managerial staff and even on magazine sections and leading articles is an unequal competitor to struggling newspapers in the provinces and ultimately kills them or forces them into the hands of chains.

Workers in the duplicating centre have to be dependent on the conditions in home offices and in many cases like Vishwamitra, if they are deplorable at home they are more deplorable in the duplicating centres.

This has been illustrated in the Kanpur Vishwamitra strike. The management dismissed the entire staff of 32 persons when they demanded some facilities from the management; their place was taken by workmen brought from its other centres of publication.

The inside pages and the editorial, in fact everything except the local pages, came printed from Calcutta and were distributed here. We would request the Commission to scrutinise the working of this chain from a variety of angles.

13. The effect on healthy traditions of journalism has been bad. On account of centralisation the editor of the edition has lost his status and the proprietor has gained much under cover of coordination. The editorial policy being dictated from one place, the paper wears an alien look at the other places of publication.

Sometimes due to failure of one or two editions and the necessity of keeping them going, the principal paper has also suffered. The subsidiary paper needs less staff than an ordinary paper and the scope of employment definitely decreases.

Service conditions can be very bad, as is evident from the fact that the conditions in Vishwamitra are the worst in the field in which it functions. On top of it, the sudden transfers act as a heavy deterrent on the independence of the journalist who, if found inconvenient, may be removed to a place most unsuitable to him.

These transfers also help the management in creating rifts among workmen and utilising patronge to the detriment of espirit de corps. It is the experience of working journalists that in practice there is no difference in the working of chains, whether owned by business men or newspapermen.

So we would suggest that the evil resides in the system rather than in the personality. Some of the points dealt with above are elaborated in later sections.

14. Though they are separately mentioned, big business and chains are not really distinct from each other. They are essentially the same in many respects.

The owners have large resources, they introduce a strong and undesirable element of competitive commerce into the newspaper world, own newspapers as one only of many other lines of business activity and use them as instruments of prestige, power and influence. In the interests of prestige, power and influence, they have often overlooked immediate monetary profit.

15. among chains, popularly accepted as such, three are prominent—the Birla, the Dalmia and the Goenka.

16. It is well known that the proprietors of two of these three chains are related by marriage; they are knit even more closely by identity of outlook on political, social and economic questions. One of them is now associated with an enterprise for the manufacture of newsprint.

17. Chains are of recent origin. The proprietors took over some existing English newspapers and later added Indian language papers and several weeklies.

A complete financial picture of them can be obtained only by a thorough scrutiny of their own accounts as well as those of sister concerns.

Some of them are reputed to have different sets of accounts. In order to carry out this scrutiny it is necessary that the Commission should engage its own independent auditors and examine the chief accountants and other officials of the concerns.

18. The main question for consideration is whether we are witnessing a progressive concentration of ownership of the press in the hands of an oligarchy. The symptoms appear to leave no doubt about the answer. The process at work is somewhat as follows:

A paper in distress wants to be saved from extinction, a rich man steps in and takes it over. Another struggling paper feels that it cannot stand competition under the changing conditions and sells out.

A third has a proprietor or a set of shareholders, who are tempted by the prospect of ready money and part with their shares. An example of a newspaper changing hands in this way is the Leader of Allahabad.

The person who was identified with it had at no stage in his lifetime allowed any newspaper magnate to acquire it or exploit it.

But within a few months of his death, the newspaper was sold as a purely commercial and political deal with no regard for its special tradition and character. Two millionaires ran neck to neck and one of them succeeded.

19. Another example in a different category is the Bharat group of papers. In another part of this memorandum we have dealt with the way in which the staff of the Bharat group has been deprived of their legitimate dues.

A close examination of this deal will reveal loopholes in the company law, which is used by financiers to the disadvantage of the public and of the employees.

20. The Dalmia chain came into existence in different circumstances. The Times of India was sold out by its European proprietors, who felt that a British newspaper of its kind had lost its raison d’etre after Britain’s transfer of power to India. Since then it has branched out from Bombay to Delhi and is now going to Calcutta.

21. A point to be examined in this context arises from an entirely different attitude adopted by another British concern. The Statesman did not share the view that in the new political conditions a British newspaper had no place in India.

It continues as the sole journalistic survivor of the old British dispensation. (Incidentally it was the first newspaper in India to initiate the new experiment of simultaneous publication from two cities.) A subject of enquiry would be, we suggest, how far it is in national interest to allow non-nationals to control organs of public opinion in India.

22. As regards control we assume that what is meant is the ultimate control exercised by shareholders. Most Indian newspapers are privately owned. As already stated they are mainly family concerns.

They are able to provide finance even without the formality of issuing shares or debentures, and they attract people who have money to invest but who do not want to make their investments openly and do not concern themselves with control or management, so long as dividends are assured.

23. In Indian conditions, so far as the newspaper big business is concerned, no precise difference separates management, control and ownership. Members of the same family are employed in various capacities.

A good part of what appears in the books as expenditure under the head salaries and allowances returns to the family. The financial resources of these concerns are often siphoned into sister concerns or go to the benefit of relatives in the shape of commission or are shown as high rentals for accommodation or equipment.

24. The balance sheets, the profit and loss accounts, the wage bills etc. of newspapers in this class require expert examination by the Press Commission’s own accountants.

The qualifications of the employees, their relationship to the shareholders and directors and the salaries they draw should also be investigated.

25. The case for and against chains and the intrusion of big business into newspaper production may be stated at this stage.

In defence of chains and big business, it has been urged that they are legal; that they represent a natural expansion of free private enterprise; they are subject to such indirect checks as are provided by the tradition, the general climate, and the personality of each institution, the general pressure exerted by the susceptibilities of public taste and the instincts of the reader, the power of deep-rooted local loyalties, the presence of several competing non-chain newspapers with the right kind of traditions.

Another type of argument advanced is that the chains and the big business interests controlling them have the resources to contribute to the technical advancement of newspaper production and to the improvement of news services; that they enlarge the field of available employment and so should be welcomed by working journalists.

26. The validity of these arguments may be examined both from the point of view of working journalist and from the point of view of the country as a whole.

Journalists would not concern themselves with the question whether chains have legal sanction or are theoretically good or bad. Journalists would judge chains by their practical effect on working conditions and on the shaping of newspapers as instruments of social and political progress.

Applying this test, it may be observed that chains have not in fact produced better newspapers as compared to non-chain newspapers; nor have they necessarily or invariably provided better conditions of work.

27. On the positive side, the following points may be urged:—

The whole trend of progressive social and economic thought is against large accretions of productive power in the hands of the few. Decentralisation is an accepted policy. Newspapers in India, as elsewhere, are an industry, and have no claim to freedom from the restrictions and controls which are dictated by social and economic necessity.

(The only freedom to which they are entitled is freedom of expression.) Controls and restrictions are either self-imposed or state-imposed. If newspaper chains are inspired by no higher motives than are other industries, then the case for the application of the same controls and restrictions to the one as to the other is difficult to resist.

The State has assumed power, for instance, to control the geographical location of industries. The power rests upon the principle that the State has the right to make sure that industries are established or expanded in the interests of the country as a whole and not in accordance with the individual promoter’s convenience or desire.

28. Some newspaper chains are acting in a way that raises many disturbing questions. Reference has already been made to the newspaper, which now appears from Bombay and Delhi, and is spreading out to Calcutta? Is it justified by the promise of better value to the reader in Calcutta than the existing newspaper there provide?

By expanding eastwards, is the proprietor diverting profits away from their legitimate use for the betterment of the salaries and working conditions of the existing staff in Bombay and in Delhi?

29. The functioning of chains may be examined from the point of view of its effect on the status of the editor. That is a real criterion. Wickham Steed has observed: “The paper’s principal purpose is to give the public prompt, adequate, and accurate news, and to reflect and help in the formulation of public opinion.

The moment it begins to subordinate that to commercial interest, it begins to deteriorate, to fail in its trust, to surrender the reason for its existence.

This is not to ignore the importance of the business side of the paper, but it is to insist that the success of the business side must be the consequence of a thoroughly good editorial side to the public and not the determining factor in the editorial service.”

30. Scott has said: “The editor and the manager must march hand in hand, the editor one step ahead.” In India it is the manager who is one step ahead.

31. These quotations set forth the ideal as contrasted with the actual state of things. In actual fact, the de facto editor in chains suffers a double deprivation.

He does not decide editorial policy nor does he always control the editorial staff, he loses both the status and designation to the proprietor or the managing director, who sets himself up as “managing editor.”

Such an assumption of title enables the managing editor to suggest that as the de facto editor’s name does not appear as editor, he would not be publicly associated with any policy that the managing editor may lay down for the paper. This leads to a position in which editorials appear without the de facto editor’s knowledge. So do news stories and even corrections.

32. Some other fundamental objections to chains are: the owner of chains shrinks from risks which the old-time editor or editors or the small proprietor would take in order to serve a public cause. The proprietor of chains is inclined to buy peace at almost any cost.

He does not act fearlessly against the Government and does not challenge its ways even when those ways are felt to be wrong. He has many other interests to safeguard.

33. As regards his motives, it is generally the case that he has found newspaper production a fairly safe commercial and political risk. He has tasted the power and prestige that ownership of newspapers brings.

He has thus the advantages of a combination of economic and political advantages which few other enterprises provide. Instances are not lacking in which newspaper proprietors have used their position and influence to advance their other trade and commercial enterprises. Some proprietors may be usefully interrogated by the Commission about the licenses and permits them and their friends and relatives have obtained during the last few years.

34. The Encyclopaedia Britannica says: “Multiple ownership of newspapers possesses all the commercial and financial advantages of other big business, but mass production and centralised control destroy individuality.

As members of a big combine newspaper lose character, they tend towards a standardised type. They may be between productions than is possible under isolated ownership but the old conception of a newspaper as an institution with a soul of its own, which could not be measured by ordinary commercial standards, is gone.”

35. On the intellectual plane, Wickham Steed observes: “These forces tend to restrict the channels of public information.

It stands to reason that when the public of a great city has a choice between only two ‘organs of opinion’ it is unlikely to be supplied with the same variety and fullness of news and comments as when five or six independent journals are competing for its favour. In this way one aspect of public freedom is curtailed.”

36. Reference has been made earlier to the possible influence of non-national interests controlling newspaper production in India.

Other external influences are those of advertisers and commercial houses, which are discussed under the relevant head. A recent phenomenon is the importation of foreign journalists by at least one chain, with results which cannot help the progress of journalism.

The advent of a non-Indian news editor in the chain mentioned above has meant a certain cheapening and vulgarising of news coverage and presentation in the newspaper concerned. A further type of foreign influence is exerted through the bulk printing of propaganda literature by Indian newspaper presses on terms far above any strictly business considerations would warrant.

37. It is argued that if the British Royal Commission has reported against action to end chains, a different conclusion may not be possible in Indian conditions.

As against this, it must be pointed out that the Royal Commission’s report caused great disappointment to many sections of British public opinion. The feeling against chains is intense in India, where the need to protect infant democratic institutions is much greater.

38. Whatever its conclusions might be the British Royal Commission has expressed clear views as to the dangerous character of chains.

It says “The question at what stage of its development either in size or integration, a chain may become a potential danger to public interest does not appear to us to be susceptible of a simple answer.

Much depends on the integration of the chain, particularly on the editorial side and on the geographical concentration of its members.

While therefore we are of the opinion that the growth of a chain to a size appreciably larger than now in existence would be undesirable, we do not feel able to specify any limit in advance of such a development and we do not recommend that any statutory limit should be put.”

39. In passing, we would refer to some preventive-cum-curative steps taken in two democracies. In U.S.A. proprietors of newspapers are required, under rules enforced by Government, to submit at intervals details about invested capital and any increases or decreases in such capital that might have taken place. Other restrictions are also imposed under anti-Trust laws.

40. In France, a limit is placed on the number of shares one can hold in a newspaper. That limit is ten per cent of the share capital. The law also provides that any person, who has a predominant voice in any industry having a capital more than ten million francs, shall not own any newspaper.

41. In any effort to counter the effects of chains in India, similar restrictions are worthy of examination. It may also be considered whether special powers, analogous to the Reserve Bank’s powers of inspection of banks, should be assumed to receive and inspect the accounts of newspaper establishments.

42. A suggestion canvassed in this connection is to foster and encourage the present trend towards increasing association of employees with the management and control of newspapers. This is a trend of which the ultimate issue will be co-operative management and control by the staff.

Experiments in this field have already been undertaken but whatever degree of success may attend these individual efforts to break new ground, co-operative ownership, management and control constitute the next important stage in the evolution of newspapers as a whole in Indian conditions.

It is our claim that co-operative ownership, management and control really mean the production of newspapers, not as a profit-making or prestige-building industry but as instruments of public good.

Co-operative control and management may be established either by voluntary action of existing newspaper interests or by legislation.

43. As a way of countering the effects of chains, the British Royal Commission in its report has discussed suggestions to peg newspaper circulations. This idea may be investigated by the Commission in relation to Indian conditions.

44. In the case of chain as well as non-chain newspapers, it has been pointed out that job printing or publication of journals, magazines and books, undertaken by a newspaper unit, should not be kept apart in the matter of accounts.

Such bifurcation of accounts is felt to be a device intended to keep down figures of revenue. This requires investigation.

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