Business and Magazine Journalism (combination of Niche I and II)

1 Growing importance of business journalism, a brief history (2)

2 The structure of financial management in the country starting with the Finance Minister, (5) rest of the bureaucracy, RBI governor, Planning Commission, SEBI, Banking sector

3 The Budget preparation and presentation, factors influencing the annual budget, role of (5) subsidies and foreign exchange reserves

4 Companies, balance sheets, AGMs window dressing of balance sheets, the loopholes (the case of Satyam) (5)

5 Stock exchange, Sensex and its ups and downs, need for stricter monitoring, how to (5) cover Stock Exchanges, qualities of a good stock exchange reporter

6 Ethics for business journalism. Should it be a watch dog or servant of business houses? (5) Role of freebies, junkets, five star attractions and need to resist them

7 Magazine journalism: The Indian scene, eclipse of the general interest magazines, (5) stagnation of news magazines, scope for special interest magazines. The role of the consumers purchasing power more important than editorial content

8 Magazines during post emergency boom Success of ‘India Today’. How can magazines (5) compete with the challenge posed by TV which now covers sports, celebrities, life style, news and business. How to find out if there is a niche for new magazines. Comment on Travel, Health, Technology and career-guidance magazines

9 Western craze among glossy women’s magazines, Better fare offered by regional (5) women’s magazines

10 Writing and editing for magazines, special skills needed. Importance of the rewrite desk (4)

11 Role of Alternative media to deal with people’s issues. Scope for magazines devoted to environment and civic issues (4)

Business Journalism- It’s all about Money!

  • Pink papers
  • The ‘pink papers’ refer to financial newspapers like the Economic Times, which are referred to as ‘pink’ because they are all printed on salmon pink newsprint like many Western financial dailies.
  • Business reporting
  • Company/Corporate news, announcement of deals, appointments, capital raising etc.
  • Regulatory announcement
  • Political news with a business implication
  • Stock market
  • Bond
  • Equity
  • Currency
  • Commodity

The movement in the above mentioned segments and the reasons for the same, make for a story.

  • Unorgranised and Organised sector.
  • Business Media
  • The business media focus on stock prices, growth rates, market shares, bottom lines and such.
  • For a complete story one should look at what fundamentally influences the other. E.g Tata Nano
  • Its complicated but interesting.
  • Business journalism is a big, broad multifaceted thing. There are science writers and financial writers and social issues writers. There are corporate writers, so there’s a whole range if you work for a business publication. Newspaper’s business writers tend to write about business.
  • 3 factors why the Indian media is in limelight
  • 1. Democracy is the first reason. It allows us to read, write, make, watch and listen to whatever we want. It gives investors a range of options and market, a depth unlike other Asian markets.
  • 2. Profits and Returns. On the back of the ad and pay revenues, operating margins for a bulk of the listed M&E have risen anywhere between 15 to 100% over the last 3 years.
  • 3. M&E liberalization began in 2003. Regulation freed publishing to get institutional money. DTH licenses were issued. Add radio and multiplex sector and media sector was free to talk to the investors. As a result every part of the industry is ready to build scale and realize its potential.
  • Film companies have been professionalizing, publishing is expanding all over the country, broadcasters have more options like the DTH and broadband to sell television signals, and radio is finally free to licence fees. The capital is reaching these at the right time. Therefore, the industry will deliver.
  • The India Media Business by Vanita Kohli Khandekar
  • Milestones in business reporting
  • The liberalisation process of 1991
  • Prior to this business dailies were like government PR vehicles and there were no regulators like SEBI
  • It was a regulated regime and there was a ‘license raj’
  • India was cocooned economy where flying was a luxury
  • Journalists also carried a Nehruvian Socialist sort of legacy
  • 1969: Banks were nationalised
  • 1976: Emergency was imposed
  • 1991: Indian economic reforms were initiated
  • Harshad Mehta Scam in 1993
  • The Indian stock market and investor saw a frenzy
  • The Indian middle-class saw new avenues of making money. Broking firms came into being at a large scale
  • The panwallahs were also discussing the stock market
  • Corporates then became more proactive and felt the need to communicate
  • Contd..
  • UTI scam
  • Satellite Television in 1993
  • Telecom Revolution
  • Internet
  • These coupled with the economic reforms brought about a revolution in media as well.
  • There were no dedicated journalism courses
  • Business journalists were typically Economic background students, bankers, analysts etc
  • Business India in 1978–first Indian business magazine launched by Ashok Advani
  • 1978 also saw the launch of India’s first housing loan company HDFC
  • Businessworld in 1980s
  • Business Today in 1992
  • Analyst firms/broking firms: Indiainfoline launched the first dedicated anlayst firm: Probity
  • SEBI was formed in 1992 to protect the interest of the investors and to promote the development of and regulate the securities market
  • Assignment
  • Find out in the Indian market
  • Financial newspapers
  • Business magazines
  • Wire agencies
  • Dedicated portals
  • Business news channels
  • Names of key analysts
  • Editors of the magazines, newspapers
  • Which magazines, channels and papers belong to the same media house and their history in business reporting
  • The foreign tie-ups and likely launches in the coming month
  • Role and Importance of SEBI

Business Journalism in India

  • Business journalism in India is getting a little bit more colorful and glamorous, it's just because of the sheer explosion in the number of business personalities in India, especially in the last decade or so after economic liberalization really picked up.
  • This explosion is visible in enterprise and the new number of companies that are coming up, and the booming stock market, which has really raced up in the last few months. More personalities to cover, and with the increase in the number of business channels competition is the driving force.
    CEOs are huge personalities, and because the base of retail investors in India has expanded so dramatically in the last few years, they're far better known in public life, among the Indian public as well.
  • There are many channels of distribution for journalism, including business journalism. People get news through video, audio, Internet, print.
  • It is increasingly becoming a multimedia interactive world.
  • In an era of fragmentation of media outlets, it’s going to be more important than ever for business journalists to pull it all together, to provide the insight and understanding in the best days, the wisdom, that will be necessary. The world doesn’t need more information. It needs more understanding, more insight, more analysis.

What is the Finance Commission?

The Finance Commission is constituted by the President under article 280 of the Constitution, mainly to give its recommendations on distribution of tax revenues between the Union and the States and amongst the States themselves.

Two distinctive features of the Commission’s work involve redressing the vertical imbalances between the taxation powers and expenditure responsibilities of the centre and the States respectively and equalization of all public services across the States.

What are the functions of the Finance Commission?

It is the duty of the Commission to make recommendations to the President as to

the distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them and the allocation between the States of the respective shares of such proceeds;

the principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India;

the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats in the State on the basis of the recommendations made by the Finance Commission of the State;

the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State;

any other matter referred to the Commission by the President in the interests of sound finance.

Who appoints the Finance Commission and what are the qualifications for Members?

The Finance Commission is appointed by the President under Article 280 of the Constitution. As per the provisions contained in the Finance Commission [Miscellaneous Provisions] Act, 1951 and The Finance Commission (Salaries & Allowances) Rules, 1951, the Chairman of the Commission is selected from among persons who have had experience in public affairs, and the four other members are selected from among persons who--
(a) are, or have been, or are qualified to be appointed as Judges of a High Court; or
(b) have special knowledge of the finances and accounts of Government; or
(c) have had wide experience in financial matters and in administration; or
(d) have special knowledge of economics

How are the recommendations of Finance Commission implemented?

The recommendations of the Finance Commission are implemented as under:-

Those to be implemented by an order of the President:

The recommendations relating to distribution of Union Taxes and Duties and Grants-in-aid fall in this category.

Those to be implemented by executive orders:
The recommendations in respect of sharing of Profit Petroleum, Debt Relief, Mode of Central Assistance, etc. are implemented by executive orders.

When was the first Commission appointed and how many Commissions have been appointed so far?

The First Finance Commission was constituted vide Presidential Order dated 22.11.1951 under the chairmanship of Shri K.C. Neogy on 6th April, 1952. Thirteen Finance Commissions have been appointed so far at intervals of every five years.

Is the Finance Commission unique to India?

Most federal systems resolve the vertical and horizontal imbalances through mechanisms similar to the Finance Commission. For example Australia and Canada.

What is the composition of the Thirteenth Finance Commission?

The Thirteenth Finance Commission has been set up under the Chairmanship of Dr. Vijay L. Kelkar [former Union Finance Secretary and Advisor to the Finance Minister]. Other Members of the Commission are Dr. Indira Rajaraman [Professor Emeritus, National Institute of Public Finance & Policy New Delhi), Prof. Atul Sarma, Former Vice Chancellor, Rajiv Gandhi University [erstwhile Arunachal University], Dr. Sanjiv Misra [Former Secretary (Expenditure) Government of India). Shri B.K. Chaturvedi (Member, Planning Commission) is the part-time Member of the Thirteenth Finance Commission. Shri Sumit Bose is the Secretary, Thirteenth Finance Commission.

What is the tenure of the Thirteenth Finance Commission?

The Finance Commission is required to give its report by 31st October, 2009. Its recommendations will cover the five year period commencing from 1st April, 2010.

The Recession 2008

In the fall of 2008, the credit crunch, which had emerged a little more than a year before, ballooned into Wall Street’s biggest crisis since the Great Depression. As hundreds of billions in mortgage-related investments went bad, mighty investment banks that once ruled high finance have crumbled or reinvented themselves as humdrum commercial banks. The nation’s largest insurance company and largest savings and loan banks both were seized by the government. The channels of credit, the arteries of the global financial system, have been constricted, cutting off crucial funds to consumers and businesses small and large.

In response, the federal government adopted a $700 billion bailout plan meant to reassure the markets and get credit flowing again.

But the crisis began to spread to Europe and to emerging markets, with governments scrambling to prop up banks, broaden guarantees for deposits and agree on a coordinated response.

Origins

The roots of the credit crisis stretch back to another notable boom-and-bust: the tech bubble of the late 1990’s. When the stock market began a steep decline in 2000 and the nation slipped into recession the next year, the Federal Reserve sharply lowered interest rates to limit the economic damage.

Lower interest rates make mortgage payments cheaper, and demand for homes began to rise, sending prices up.

In addition, millions of homeowners took advantage of the rate drop to refinance their existing mortgages.

As the industry ramped up, the quality of the mortgages went down.

And turn sour they did, when home buyers had to leverage themselves to the hilt to make a purchase.

Default and delinquency rates began to rise in 2006, but the pace of lending did not slow.

Banks and other investors had devised a plethora of complex financial instruments to slice up and resell the mortgage-backed securities and to hedge against any risks — or so they thought.

The Crisis Takes Hold

The first shoe to drop was the collapse in June 2007 of two hedge funds owned by Bear Stearns that had invested heavily in the sub-prime market.

As the year went on, more banks found that securities they thought were safe were tainted with what came to be called toxic mortgages.

At the same time, the rising number of foreclosures helped speed the fall of housing prices, and the number of prime mortgages in default began to increase.

The Federal Reserve took unprecedented steps to bolster Wall Street.

But still the losses mounted, and in March 2008 the Fed staved off a Bear Stearns bankruptcy by assuming $30 billion in liabilities and engineering a sale to J P Morgan Chase for a price that was less than the worth of Bear’s Manhattan skyscraper.

Sales, Failures and Seizures

In August, government officials began to become concerned as the stock prices of Fannie Mae and Freddie Mac, government-sponsored entities that were linchpins of the housing market, slid sharply.

On Sept. 7, the Treasury Department announced it was taking them over.

Events began to move even faster.

On Sept. 12, top government and finance officials gathered for talks to fend off bankruptcy for Lehman Brothers. The talks broke down, and the government refused to step in and salvage Lehman as it had for Bear. Lehman’s failure sent shock waves through the global banking system, as became increasingly clear in the following weeks.

Merrill Lynch, which had not been previously thought to be in danger, sold itself to the Bank of America to avoid a similar fate.

On Sept. 16, American International Group, an insurance giant on the verge of failure because of its exposure to exotic securities known as credit default swaps, was bailed out by the Fed in an $85 billion deal.

Stocks dropped anyway, falling nearly 500 points.

The Government’s Bailout Plan

The bleeding in the stock market stopped only after rumors trickled out about a huge bailout plan being readied by the federal government. On Sept. 18, Treasury Secretary Henry M. Paulson Jr. publicly announced a three-page, $700 billion proposal that would allow the government to buy toxic assets from the nation’s biggest banks, a move aimed at shoring up balance sheets and restoring confidence within the financial system.

Congress eventually amended the plan to add new structures for oversight, limits on executive pay and the option of the government taking a stake in the companies it bails out. Still, many Americans were angered by the idea of a proposal that provided billions of dollars in taxpayer money to Wall Street banks, which many believed had caused the crisis in the first place. Lawmakers with strong beliefs in free markets also opposed the bill, which they said amounted to socialism.

President Bush pleaded with lawmakers to pass the bill, but on Sept. 29, the House rejected the proposal, 228 to 205, with an insurgent group of Republicans leading the opposition. Stocks plunged, with the Standard & Poor’s 500-stock index losing nearly 9 percent, its worst day since Oct. 19, 1987.

Negotiations began anew on Capitol Hill. A series of tax breaks were added to the legislation, among other compromises and earmarks, and the Senate passed a revised version Oct. 1 by a large margin, 74 to 25. On Oct. 3, the House followed suit, by a vote of 263 to 171.

When the bill passed, it was still unclear how effective the bailout plan would be in resolving the credit crisis, although many analysts and economists believed it would offer at least a temporary aid. Federal officials promised increased regulation of the financial industry, whose structure was vastly different than it had been just weeks before.

The Crisis and the Campaign

The credit crisis emerged as the dominant issue of the presidential campaign in the last two months before the election. On Sept. 24, as polls showed Senator John McCain’s support dropping, he announced that he would suspend his campaign to try to help forge a deal on the bailout plan. The next day, both he and Senator Barack Obama met with Congressional leaders and President Bush at the White House, but their efforts failed to assure passage of the legislation, which went down to defeat in an initial vote on Sept. 29, a week before it ultimately passed.