Centre Approves Rs 19,041 Funding to 16 States under BharatNet Broadband (Optical Fibre) Project

NEW DELHI:

According to Telecom Minister Ravi Shankar Prasad, the Cabinet authorised the public-private partnership approach for the implementation of the BharatNet project for broadband services in villages across 16 states on Wednesday, with a viability gap financing of Rs 19,041 crore.

Mr Prasad stated that the decision to include commercial companies was made after Prime Minister Narendra Modi announced on August 15, 2020 that the country's 6 lakh villages will be connected to internet within 1,000 days.

Union Minister Kiren Rijuju expressed his gratitude to PM Narendra Modi on the implementation of the BharatNet project. 

He posted on Instagram: 'Thanks to PM @narendramodi Ji for the Cabinet approval to implement BharatNet through PPP mode with optical fibre connectivity to all inhabited villages in Arunachal Pradesh, Kerala, Karnataka, Rajasthan, Himachal Pradesh, Punjab, Haryana, Uttar Pradesh, Madhya Pradesh, West Bengal, Assam, Meghalaya, Manipur, Mizoram, Tripura and Nagaland. An estimated 3.61 lakh villages including Gram Panchayats will be covered. The estimated maximum viability gap funding approved is Rs 19,041 crores. The cabinet also accorded in-principle approval for extending BharatNet to cover all inhabited villages in the remaining states and UTs.'

Mr Prasad stated that 1.56 lakh of the 2.5 lakh village panchayats had been linked to internet to date. According to an official statement, the Cabinet also approved in principle expanding BharatNet to include all inhabited villages in the remaining states and union territories.

The minister stated that a 30-year deal will be reached with private parties, and that the project will be divided into nine parts. One package, he claims, corresponds to a telecom circular area.

"If you calculate the opex and capex of 30 years, then it comes to around ₹ 95,000 crore if the government of India had executed it. Compared to this, the government is setting up this architecture for viability gap funding of ₹ 19,041 crore," Mr Prasad said.

The viability gap financing is granted in the event that an organisation incurs a loss while carrying out a project. Viability gap financing bridges the gap between the cost of running a project and actual income realisation.

According to the minister, access to broadband in rural regions would promote e-governance, telemedicine, online education, and the development of business. Finance Minister Nirmala Sitharaman said earlier this week that the extra 19,041 crore cash brings the overall spending for the BharatNet project to 61,109 crore.

Ms Sitharaman stated that 42,068 crore had already been spent on reaching 1,56,223 gramme panchayats that were ready for internet services as of May 31.

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