In his 108-minute budget speech delivered on February 1, the Finance Minister Arun Jaitley spent less than a minute on the telecom sector. The minister said that "the recent spectrum auctions have removed spectrum scarcity in the country, and allocated an additional Rs 10,000 crore for BharatNet project in 2017/18." Jaitley said that OFC (optical fibre cable) of Rs 1.55 lakh kms have been laid under BharatNet, and by the end of 2017/18, high-speed broadband connectivity on optical fibre will be available in over 1.5 lakh gram panchayats (GPs).
The higher allocation is fine, but the target looks over-ambitious if one goes by the pace of its implementation. The BharatNet project (erstwhile known as National Optical Fibre Network or NOFN) was launched by the UPA government in 2011. The NOFN project was proposed to be completed in two years at an estimated cost of Rs 20,000 crore. The plan is to connect all 2.5 lakh GPs in the country by utilizing existing fibres of PSUs (BSNL, Railtel and Power Grid) and laying incremental fibre to connect GPs wherever necessary.
The project's progress has been dismal so far. In over five years of existence, only 84,575 GPs have been covered by OFC pipes, out of which 76,089 GPs have actually seen optical fibre. The project is operational in just 16,355 GPs, or less than 7 per cent of GPs the project has envisaged to cover.
With such negligible coverage, the project has already been allocated or received funding of Rs 19,054.43 crore, including the sum allocated in the recent budget. BharatNet is funded through Universal Service Obligation Fund (USOF), which has eight other operational projects to enhance mobile and internet connectivity across the country. The USOF has thus far generated resources of Rs 80,824.21 crore, out of which Rs 47,163.39 crore is unused. The USOF funds are generated through Universal Access Levy (UAL), a levy on all telecom service providers as a prescribed percentage of their adjusted gross revenues.
Access to broadband significantly boosts economic growth. According to World Bank estimates, a 10 per cent increase in broadband penetration accelerates economic growth by 1.38 per cent in low- and middle-income countries. India's broadband penetration stands at low 7 per cent, as per International Telecommunication Union (ITU). The low broadband penetration is a matter of concern. The higher allocation for the project proves that Narendra Modi government is serious about enhancing the broadband penetration but now the implementation has to pick up pace for the government to meet its ambitious targets.
The higher allocation is fine, but the target looks over-ambitious if one goes by the pace of its implementation. The BharatNet project (erstwhile known as National Optical Fibre Network or NOFN) was launched by the UPA government in 2011. The NOFN project was proposed to be completed in two years at an estimated cost of Rs 20,000 crore. The plan is to connect all 2.5 lakh GPs in the country by utilizing existing fibres of PSUs (BSNL, Railtel and Power Grid) and laying incremental fibre to connect GPs wherever necessary.
The project's progress has been dismal so far. In over five years of existence, only 84,575 GPs have been covered by OFC pipes, out of which 76,089 GPs have actually seen optical fibre. The project is operational in just 16,355 GPs, or less than 7 per cent of GPs the project has envisaged to cover.
With such negligible coverage, the project has already been allocated or received funding of Rs 19,054.43 crore, including the sum allocated in the recent budget. BharatNet is funded through Universal Service Obligation Fund (USOF), which has eight other operational projects to enhance mobile and internet connectivity across the country. The USOF has thus far generated resources of Rs 80,824.21 crore, out of which Rs 47,163.39 crore is unused. The USOF funds are generated through Universal Access Levy (UAL), a levy on all telecom service providers as a prescribed percentage of their adjusted gross revenues.
Access to broadband significantly boosts economic growth. According to World Bank estimates, a 10 per cent increase in broadband penetration accelerates economic growth by 1.38 per cent in low- and middle-income countries. India's broadband penetration stands at low 7 per cent, as per International Telecommunication Union (ITU). The low broadband penetration is a matter of concern. The higher allocation for the project proves that Narendra Modi government is serious about enhancing the broadband penetration but now the implementation has to pick up pace for the government to meet its ambitious targets.
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