Digital Bharat Nidhi (DBN) is a new initiative aimed at boosting telecom connectivity in rural and underserved areas of India, replacing the previous Universal Service Obligation Fund (USOF). On July 4, the Department of Telecommunications (DoT) released draft rules for implementing this project. The USOF was funded by a 5% levy on the Adjusted Gross Revenue (AGR) of telecom operators. With the introduction of DBN, the Indian government is taking a significant step towards enhancing digital infrastructure in underserved regions.
Digital Bharat Nidhi Objectives
Digital Bharat Nidhi is designed to provide universal and easy access to telecom services in underserved regions. It will fund research and development in telecom technologies, support pilot projects, and introduce innovative telecom services and products. The goal is to bridge the digital divide, ensuring that advanced telecom services are accessible to everyone, regardless of location.
Need for Digital Bharat Nidhi
DBN was created to improve telecom services in remote and rural areas, which are often overlooked by private companies due to low revenue potential. The government plans to use DBN funds to expand telecom networks in these underserved areas.
With recent updates to the Telecom Act, the government introduced new rules to transition from USOF to DBN, which will have a broader scope and aim to enhance digital connectivity across more regions.
About the Universal Service Obligation Fund (USOF)
The Universal Service Obligation Fund (USOF) was established in 2003 to improve telecom services in less profitable areas. It was financed by a 5% levy on the AGR of telecom operators. Despite generating significant funds, the USOF faced criticism for underutilization, with only about 72% of the Rs 41,740 crore collected between 2017 and 2022 being spent. This inefficiency led to budget cuts in FY23, affecting projects like BharatNet. The need for better fund management and results prompted the shift towards the more comprehensive DBN initiative.
Digital Bharat Nidhi Plan and Implementation
The plan for DBN involves directing telecom companies’ contributions to the Consolidated Fund of India (CFI), which includes all government revenue, loans, and repayments used for government expenses. The government will periodically transfer funds from the CFI to the DBN. These funds will be used for several purposes, including:
– Developing new telecom services, technologies, and products
– Supporting pilot projects
– Offering consulting and advisory services to enhance connectivity
– Introducing innovative telecom services and technologies
– Expanding telecom services in underserved urban, rural, and remote areas
How Digital Bharat Nidhi Will Work?
According to DoT guidelines, the government will appoint an “administrator” to oversee DBN. This administrator will select “DBN implementers” through applications or bidding processes and determine various financing options, including full funding, partial funding, co-funding, market risk mitigation, and providing risk capital.
DBN aims to support programs and initiatives that enhance access to telecommunication services for marginalized groups, such as women, people with disabilities, and economically and socially disadvantaged communities, promoting inclusivity and bridging the digital divide.
Goals and Impact of Digital Bharat Nidhi
DBN aims to do more than expand telecom services; it is designed to foster technological innovation and support new businesses in the telecom industry. By leveraging cutting-edge technologies, DBN seeks to create a dynamic environment for technological advancements, including establishing regulatory sandboxes for testing new ideas.
DBN’s focus on standardization and international compliance will enhance the competitiveness of India’s telecom sector globally. This initiative aims to improve connectivity, drive innovation, support start-ups, and ensure that the Indian telecom industry remains at the forefront of technological advancements. By setting high standards and promoting compliance with international benchmarks, DBN will help the Indian telecom sector compete more effectively worldwide. This comprehensive approach ensures that the goals of expanding services, promoting innovation, and enhancing global competitiveness are all met.
