What is Digital Bharat Nidhi, govt’s fresh attempt at improving rural telecom connectivity?

Sub: Schemes

Sec: Computer

Digital Bharat Nidhi Draft Rules:

The Department of Telecommunications (DoT) released draft rules for the Digital Bharat Nidhi (DBN), replacing the Universal Service Obligation Fund (USOF).
DBN aims to enhance telecom connectivity in rural areas and has a broader scope than USOF.
DBN will now take over this role with updated rules and objectives.
DBN will also add to:
- Research and development in telecommunication technologies.
- Help with pilot projects and consulting services that will improve connectivity.
- Telecommunications services that help underserved groups, like women and people with disabilities, should be financed.
- Making the telecom sector more open to new ideas and technologies made in the country.

Digital Bharat Nidhi (DBN) Framework:

Funding Mechanism:
- Telecom companies’ contributions to DBN will go to the Consolidated Fund of India and then transferred to DBN.
- Funds will support telecom services in underserved areas, R&D, pilot projects, and new technology introduction.
Operational Structure:
- An administrator will be appointed to select DBN implementers through bidding or applications.
- Funding modalities will include full, partial, co-funding, market risk mitigation, and risk capital.
Targeted Schemes and Projects:
- Focus on underserved groups like women, persons with disabilities, and economically weaker sections.
- Promote next-generation telecom technologies, improve affordability, encourage innovation, R&D, indigenous technology, and support start-ups in the telecom sector.

About Universal Service Obligation Fund (USOF):

Set up by an Act of Parliament in December 2003 by amending the Indian Telegraph Act, 1885.
Objective: To provide access to telecom services in a nondiscriminatory manner to people in rural and remote areas at affordable and reasonable prices, thereby bridging the rural-urban digital divide.
For commercially non-viable rural and remote areas, USOF provides subsidy support in the form of Net Cost or Viability Gap Funding (VGF) to incentivize telecom service providers to expand telecommunications and broadband services in those areas.
Funding Mechanism:
- USOF, funded by a 5% levy on telecom operators’ Adjusted Gross Revenue (AGR), supported telecom network expansion in remote areas.
Administration:
- Headed by the Administrator, USO Fund who is appointed by the Central Government, for the administration of the fund.
- It is an attached office of the Department of Telecommunications (DoT), Ministry of Communications.

Underutilisation of USOF:

Since 2003,USOF faced criticism for underutilisation.
From 2017-2022, only 72% of collected funds were used.
- In 2019-20, only Rs 2,926 crore of Rs 7,962 crore collected was utilized.
- FY23 expenditure estimates were revised significantly lower due to underspending, particularly in the BharatNet project for village fibre connectivity.

Source: IE