About
- Digital Bharat Nidhi (DBN) is the Department of Telecommunications (DoT) initiative.
- The idea is that this money would be used to fund the expansion of telecom networks in remote and rural areas, where private companies may otherwise resist offering their services due to them not being revenue-generating markets.
Digital Bharat Nidhi Aims to:
- Improve internet connectivity, particularly in rural, remote, and economically disadvantaged areas.
- Foster technology innovation, create regulatory sandboxes, and enhance the global presence of India’s telecom sector.
- Promote innovation, indigenous technology development, and standardization.
- Support start-ups in the telecom sector and telecom equipment manufacturing.
- It replaces the Universal Service Obligation Fund (USOF) to ensure better allocation of resources.
- Focus: DBN will focus on research, development, and overall connectivity improvement. It encourages telecom services for underserved groups, including women and people with disabilities.
- Funding: Telecom companies’ contributions to the Digital Bharat Nidhi will first be credited to the Consolidated Fund of India (CFI) and then later deposited into the DBN.
- Utilization of funds:Â The funds will be used to promote access to telecommunication services, support research and development, fund pilot projects, and introduce new telecom technologies in underserved areas.
- Management and Implementation: A dedicated administrator will manage the fund, ensuring transparency and accountability. Projects will be executed by implementers selected through bidding or direct applications. The administrator will tailor payment methods (full, partial, co-funding) based on specific connectivity needs, demonstrating the adaptability of the process.
About Universal Service Obligation Fund (USOF)
- Universal Service Obligation Fund (USOF) was established in 2003 to enhance telecom services in less financially viable regions.
- It was funded by a 5% levy on telecom operators adjusted gross revenue (AGR). However, only about 72% of the Rs 41,740 crore received between 2017 and 2022 was utilized.
Need for the DBN (Issues in USOF)
- Underutilization of Funds: USOF has been criticised for significantly underusing funds allocated to it. For example, between 2017 and 2022, despite collecting Rs 41,740 crore from telecom operators, only Rs 30,213 crore (72%) was utilized. In some years, utilisation was even lower, indicating inefficiencies in fund deployment.
- Bureaucratic Delays and Red Tape:Â Projects funded by USOF often face delays due to bureaucratic processes and approvals. This bureaucratic inertia hampers the timely deployment of telecom infrastructure in rural and remote areas, defeating the fund’s purpose.
- Lack of Transparency and Accountability: There have been concerns about transparency in how funds are allocated and disbursed. Limited accountability mechanisms make it challenging to track the effectiveness of USOF investments and ensure funds reach intended beneficiaries.
- Mismatch Between Fund Collection and Utilisation:Â The disparity between funds collected through the Universal Service Levy and actual expenditure raises questions about fund management. High collection rates contrasted with lower utilization rates suggest inefficiencies in project selection, implementation, or monitoring.
- Complexity in Project Implementation: USOF projects often require extensive planning and coordination with multiple stakeholders, leading to implementation complexities. Deploying telecom infrastructure in remote areas involves technical challenges such as terrain, connectivity issues, and infrastructure maintenance.
- Inadequate Focus on Last-Mile Connectivity: Despite its mandate to enhance connectivity in underserved areas, USOF initiatives sometimes fail to address last-mile connectivity issues effectively.
