The Ministry of Rural Development has rejected a proposal to use funds under the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) for the proposed optic fibre cable-based broadband network.
The project, envisaged under the National Broadband Plan, aims to roll out 500,000 route km of optic fibre cable across the country to boost broadband uptake.
The Department of Telecommunications (DoT) had suggested linking the MNREGA with the broadband project in a bid to meet various costs. However, the Ministry of Rural Development has refused to link the two, although it has backed the overall broadband plan.
It is believed that DoT will now seek the Telecom Commission’s approval to finance the entire project from the Universal Services Obligation fund. The optic fibre cable network is expected to cost around Rs 180 billion over a three-year period. The USO fund currently has about Rs 200 billion, which is expected to reach Rs 300 billion in three years.
Sam Pitroda, the advisor to the Prime Minister on public information infrastructure and innovations, has roped in the chief executive officers of Bharti airtel, Reliance Communications, Tata Communications, Hathway Cable, Tikona Digital and You Telecom, to be part of an advisory body that will implement this initiative.
This panel will also include the chairman of the Unique Identification Authority of India (UIDAI), Nandan Nilekani along with representatives from ministries such as education, rural development, health, Panchayati Raj and the Planning Commission.
The project involves setting up a special purpose vehicle (SPV), comprising Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) and other public sector undertakings such as RailTel, Gail and Power Grid Corporation.
The final details of the SPV are yet to be ironed out, as DoT is looking to limit BSNL and MTNL?s holdings in the SPV to 49 per cent, with the remaining being owned by private companies, where the maximum ownership by a single firm is limited to 26 per cent. DoT is keen on this model, as it may bring about a level-playing field between different stakeholders in the project with private players bringing in best industry practices.
It is believed that a separate high-level committee, consisting of DoT and IT department officials will coordinate and give strategic directions to all activities relating to creation, implementation and management of the project. This committee has also been entrusted with the task of finalising all matters relating to the scope of the project, including the roles and responsibilities of all agencies involved in implementation.
