The Government on Friday cleared a proposal for financial restructuring of Prasar Bharati while waiving off debt of over Rs. 1,300 crore.

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 (PB) which had been constituted to examine various issues pertaining to the functioning of Prasar Bharati.

“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 on Friday.

Following this approval, during the next five years from 2012-13 to 2016-17, Government non-Plan support will be made available to Prasar Bharati for meeting hundred percent expenses towards salary and salary related expenses.

All other operating expenses to be borne by the Prasar Bharati through its 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.

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.

Loan-in-perpetuity and capital loans provided to Prasar Bharati will now be converted into grants-in-aid.

In another major relief, the accumulated arrears of space segment and spectrum charges accrued to the broadcaster upto 31st March 2011 of Rs 1,349.54 crore, will now be waived off.

The Prasar Bharati (PB) has been grappling with various financial, human resources, employee issues since its inception, the statement said.

In view of these problems, a GoM was constituted to examine these issues. The GoM was again reconstituted on 21st February 2011 which considered Prasar Bharati’s future revenue earning potential given its public service broadcasting mandate, and made a number of recommendations for making it financially viable and sustainable, the government statement said.

The government has provided Prasar bharati capital loan upto Rs 1,426. 26 crore till March 2010.

In addition, assets belonging formerly to Doordarshan and All India Radio were also transferred to Prasar Bharati as ‘loan in perpetuity’.

Following the cabinet order, the loan in perpetuity worth Rs 4,258 crores and capital loan worth Rs 1, 426 crore will be now converted into grants in aid to Prasar Bharati.