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Digital Bharat Nidhi (DNB)
Context: The Department of Telecommunications (DoT) released draft rules to operationalise the Digital Bharat Nidhi, it would replace the erstwhile Universal Service Obligation Fund (USOF).
Digital Bharat Nidhi
- It was established through the Telecommunications Act, 2023, passed by Parliament.
- Goal: Improve and expand efforts to connect people to the Internet, especially in rural, remote, and poor urban areas.
- Objectives:
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- Enhance rural telecom services.
- Support research and development in telecommunication technologies.
- Finance pilot projects and consultancy services.
- Provide targeted access to telecommunication services for underserved groups.
- Promote innovation, research, and development of indigenous technologies.
- Focus Areas:
- Target Groups: Women, persons with disabilities, economically and socially weaker sections.
- Technological Goals: Introduce next-gen telecom technologies, improve affordability, promote innovation, R&D, and indigenous technology.
- Standards and Startups: Develop national and international standards, encourage telecom sector startups and manufacturing.
- Funding: Contributions from telecom companies will be credited to the Consolidated Fund of India (CFI) and then deposited to the DBN.
- Funds will be utilised to support universal telecommunication services, research and development, pilot projects, consultancy, and advisory support.
- Funding will be determined case-by-case, including full, partial, co-funding, market risk mitigation, and risk capital.
- The government will appoint an administrator to manage it who will select DBN implementers through bidding or invitations for applications from eligible persons.
Consolidated Fund of India (CFI): Article 266 provides for the provisions for the consolidated fund of India.
- It is an account in which all revenues that the government receives, including loans raised and all money received in repayment of loans, are credited.
- The government also incurs its expenditures from this fund.
Impact of Digital Bharat Nidhi
- Improving Rural Connectivity: Focus on expanding telecom networks in remote and rural areas where private companies may not find it profitable.
- Enhancing Competition: Encourages innovation and new businesses in the telecom sector, making it more competitive globally.
- Addressing Underutilization: Replaces the USOF, which had been criticised for not utilising funds effectively, aiming to improve the efficiency of the new fund.
USOF
- Established in 2003 through an amendment to Indian Telegraph Act of 1885.
- Funding Source: It was funded by a 5% Universal Service Levy on the Adjusted Gross Revenue (AGR) of telecom operators.
- Purpose: Intended to fund telecom network expansion in rural and remote areas.
- Underutilisation of USOF
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- Collection vs. Utilisation: Between 2017 and 2022, Rs 41,740 crore was collected, but only Rs 30,213 crore utilised (72%).
- Specific Fiscal Data: In 2019-20, out of Rs 7,962 crore collected, only Rs 2,926 crore utilised.
- BharatNet Project: Underspending on the BharatNet project contributed to overall underutilization.
