The Ministry of Finance has rejected the Ministry of Communications and IT?s request to categorise the cost incurred on developing the National Optical Fibre Network (NOFN) under the non-Plan expenditure.
Plan expenditure is generally dedicated towards development work and for asset creation. Such expenditure is related to various flagship schemes such as Bharat Nirman. Non-Plan expenditure on the other hand refers to expenses on subsidy, interest and salary. The revenue distribution under the budget is done in accordance with the type of expenditure a project is categorised into.
The Government aims to spend Rs 201 billion for this project. The Ministry of Finance is of the view that operationalising the NOFN for bringing broadband connectivity to panchayats level requires the same kind of administrative and financial approval whether categorised under plan side or non-Plan side.
Further, the Ministry believes that creation of optical fibre network is development in nature and has advised the Communication Ministry to modify the funding arrangements so that the fund can be withdrawn from plan allocation.
This is not the first time that there has been conflict between the views of the two ministries with regard to this project. Earlier, the Finance Ministry has opposed suggested the Department of Telecommunication?s (DoT) plan of appointing Bharat Sanchar Nigam Limited as the agency for executing the NOFN project. Instead, it insisted on creation of a special purpose vehicle (SPV) for implementation of the project.
The Finance Ministry had said that an SPV incorporated under the Indian Companies Act may be entrusted with the execution of the programme, wherein the SPV will select an implementing agency through competitive bidding.
NOFN aims at connecting all the village panchayats with optic fibre cable. The Government plans to drive e-governance projects on this network.
