The government on Monday approved a steep increase in rates of advertisements on private FM radio stations for its policies and programmes, a move that would benefit more than 400 community radio stations across the country.

The new rates have been announced after eight years. The last hike was done in 2015.

The pricing formula for finalising the advertising rates takes into account various factors such as city population and listenership data from the India Readership Survey (IRS) of 2019, said a statement issued by the Ministry of Information and Broadcasting.

"The new rates approved by the ministry in the month of September, 2023 include a 43 per cent increase in the base rate taking into account the rising costs dynamics for the period of December 2015 to March 2023," it said.

The statement added that with this increase, the gross base rate for FM radio advertisement will increase from Rs 52 to Rs 74 per 10 seconds and the adjustment was intended to maintain parity with current market rates.

Based on this formula along with the enhanced base rate, almost all private FM radio stations will benefit from the new recommended rates at varying percentages depending largely on their listenership giving value for both FM stations and the clients of Central Bureau of Communication.

The official statement said based on this formula the rates for 106 stations will increase by 100 per cent, while 81 radio stations will see a 50-100 per cent increase in advertisement rates. As many as 65 stations, for which listenership data was not available, will get less than 50 per cent increase in advertisement rates.

Industry representatives said that the previous advertisement rates were fixed on the basis of the India Readership Survey of 2012.

The Rate Structure Committee for Private FM Radio Stations was set up by the ministry last year to evaluate and recommend new rates which were last revised in 2015.

The committee submitted its recommendations after holding several rounds of meetings with industry experts and stakeholders in addition to taking inputs from bodies such as Association of Radio Operators of India (AROI).

AROI secretary general Uday Chawla welcomed the government decision to increase the advertisement rates for private FM channels.

"We welcome the step and we hope to see regular increases in advertisement rates in the future," Chawla said.

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