Features of Digital Bharat Nidhi 

Context:

In a fresh attempt at increasing telecom connectivity in rural areas, the Department of Telecommunications (DoT) has released draft rules to operationalise the Digital Bharat Nidhi.

Relevance:

GS II: Government Policies and Interventions

Dimensions of the Article:

1. Digital Bharat Nidhi (DBN)
2. Underutilization of USOF
3. What is the Universal Service Obligation Fund (USOF)?

Digital Bharat Nidhi (DBN)

About

• The Digital Bharat Nidhi (DBN) was established under the Telecommunications Act of 2023.
• It replaces the Universal Service Obligation Fund (USOF), which was previously responsible for promoting universal access to telecommunication services.

Features of Digital Bharat Nidhi (DBN)

• Revenue Collection and Allocation
  • Telecom companies’ contributions to DBN are initially credited to the Consolidated Fund of India (CFI), which encompasses all government revenues and expenses.
  • The Centre periodically transfers these funds from CFI to DBN for specific utilization.
• Utilization of Funds
  • DBN funds are allocated for various purposes:
    • Promoting telecommunication services in underserved rural, remote, and urban areas.
    • Funding research and development in telecom services, technologies, and products.
    • Supporting pilot projects and providing consultancy to enhance connectivity.
    • Introducing new telecom services, technologies, and products.
• Targeted Access
  • DBN aims to provide targeted telecommunication access to underserved groups such as women, persons with disabilities, and economically weaker sections.
• Administrative Mechanism
  • As per draft rules by the Department of Telecommunications (DoT), an administrator appointed by the Centre selects DBN implementers through bidding or applications.
  • The administrator decides funding mechanisms (full, partial, or co-funding) and may provide market risk mitigation and risk capital.
• Operational Guidelines
  • DBN implementers receiving funding must share telecom networks and services openly and non-discriminatorily, adhering to the administrator’s directives.
• Project Criteria
  • Projects funded by DBN must meet specific criteria such as introducing next-generation telecom technologies, improving service affordability, fostering innovation, commercializing indigenous technologies, setting relevant standards, and supporting telecom start-ups.

Underutilization of USOF

• Historical Context
  • USOF, established in 2003, has been criticized for underutilization.
  • Between 2017 and 2022, the government collected Rs 41,740 crore from telecom companies for USOF but utilized only Rs 30,213 crore (about 72%).
  • Notably, in 2019-20, out of Rs 7,962 crore collected, only Rs 2,926 crore was utilized.
  • In FY23, expenditure estimates were revised to Rs 3,010 crore, significantly lower than the budgeted Rs 9,000 crore.
• Reasons for Underutilization
  • Under-spending on projects like BharatNet, aimed at village fiber connectivity, has been a major contributor to USOF underutilization.

What is the Universal Service Obligation Fund (USOF)?

• The Universal Service Obligation Fund (USOF) was established with the primary objective of providing access to ‘Basic’ telecom services to people in the remote and rural areas at reasonable and affordable prices.
• USOF ensures that there is universal non-discriminatory access to quality ICT (Information and Communications Technology) services at economically efficient prices to people in rural and remote areas.
• It was created under the Ministry of Communications in 2002.
• It is a non-lapsable fund, i.e., the unspent amount under a targeted financial year does not lapse and is accrued for next years’ spending.
• All credits to this fund require parliamentary approval and it has statutory support under Indian Telegraph (Amendment) Act, 2003.
• Universal Service stands for universal, interdependent and intercommunicating, affording the opportunity for any subscriber to any exchange to communicate with any other subscriber of any other exchange.
• Subsequently, the scope was widened to provide subsidy support for enabling access to all types of telegraph services including mobile services, broadband connectivity, and creation of infrastructure like Optical Fiber Cable (OFC) in rural and remote areas.
• With access to affordable telecom services in remote and rural areas, the USOF is the right step towards stemming urban migration. This would ensure to generate employment opportunities in the rural areas which would help generate more income.

The USOF proposes to meet its social, economic, political and constitutional objectives which are as follows:

• To extend the telecommunication network.
• To stimulate the uptake of Internet and Communication Technologies (ICT) services.
• To bring the underserved and unserved areas of the country into the telecom spectrum and narrow down the access gap.
• To use the pooled USO levy for an equitable distribution through target subsidies.

Who are the partners of USOF?

As per the Department of Telecommunications, there are 24 partners of USOF. It includes:

• Bharat Sanchar Nigam Limited
• Tata Tele Services Limited
• Reliance Communications Limited
• Vodafone
• Bharti Airtel Limited, etc

-Source: Hindustan Times