@Siva, Thanks for acknowledging. I have been using Tata Sky HD since August 2016 and am completely disappointed with the picture quality issue on those HD channels. The issue is very disgusting especially when there are long shots (distance from the camera). We can't even see the faces of the actors there. I sent lots of mails to nodal and finally got exhausted when they asked me for a snap so that they can confirm. Then only I switched to Airtel HD. I believe you watch Telugu channels. You can find the issue very easily on Maa Movies HD. Though I don't know Telugu, I just watched that channel primarily to figure out this issue. It will be very disgusting to watch faster dances and fight scenes and that too in a HD channel. Many say Tata Sky is a premium DTH, but if that is the case then Tata Sky is really failing in the picture quality of especially regional music and movie HD channels.
But for the same TV settings, I never found those picture quality issues in Airtel HD or Videocon D2H HD and Sun Direct HD as well. Finally I settled with Airtel HD as my primary DTH and moved Tata Sky HD to my parents' room who only watch Sun TV HD.
As far as picture settings are concerned, if you reduce the sharpness to zero or keep it lesser, then the issue will be minimized a bit but not fully resolved. Actually Tata Sky should move to HEVC format for compression to resolve this. Else they need more transponders to give sufficient space to all HD channels. Since their subscription rates are higher, they should do whatever possible to give the customer a quality HD viewing experience.