NEW DELHI: The Cabinet on Friday approved the proposal for financial restructuring of Prasar Bharati (Broadcasting Corporation of India).

The proposal of the Information and Broadcasting Ministry, approved by the Union Cabinet, was based on the recommendations of the Group of Ministers (GoM) on Prasar Bharati constituted under the chairmanship of the Home Minister, to examine various issues pertaining to the functioning of Prasar Bharati. The recommendations were given over a year earlier.

“On the basis of the recommendations of GoM, the Cabinet has given its approval to improve the overall financial management of Prasar Bharati,” an official statement said.

The Government non-Plan support will be made available to Prasar Bharati for the next five years from 2012-13 to 2016-17 to meet all expenses towards salary and salary related expenses. All other operating expenses will be borne by the public broadcaster out of internal revenue earnings.

Plan capital support by the Government to Prasar Bharati will be in the form of grants-in-aid only and not in the form of loan, the statement said. Loan-in-perpetuity and capital loans provided to Prasar Bharati will now be converted into grants-in-aid.

Accumulated interest on loan-in-perpetuity, interest on capital loan and penal interest thereon payable by the broadcaster to Government will be waived off, the statement said.

The government also agreed to waive off accumulated arrears of space segment and spectrum charges accrued to the broadcaster up to 31 March 2011 totalling Rs. 13.49 billion.

The property and assets will be transferred on book value to Prasar Bharati according to the provisions of Section 16(a) of the Prasar Bharati Act 1990. Normal accounting principles will be followed to determine their future value.

The Director General of Audit, Central Revenues (DGACR) will continue to be the nodal auditor of PB and will be assisted by qualified commercial audit staff for the audit of the annual accounts.

Prasar Bharati has been grappling with various financial and human resource/employee issues since its inception, which have adversely affected its functioning as an autonomous organization. In view of the problems being faced by PB, a GoM was constituted under the Chairmanship of the then Home Minister on 7 March 2006 to examine the issues of PB. The GoM was again reconstituted on 21 February 2011 which considered PB's future revenue earning potential given its public service broadcasting mandate, and made a number of recommendations for making PB financially viable and sustainable