What is Digital Bharat Nidhi?

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Recently, the Department of Telecommunications (DoT) released draft rules to operationalise the Digital Bharat Nidhi, in a fresh attempt by the central government at increasing telecom connectivity in rural areas.

About Digital Bharat Nidhi: 

  • It would replace the erstwhile Universal Service Obligation Fund (USOF), which is a pool of funds generated by a 5 per cent Universal Service Levy charged upon all the telecom fund operators on their Adjusted Gross Revenue (AGR).
  • This money would be used to fund the expansion of telecom networks in remote and rural areas.
  • Working of the Digital Bharat Nidhi
    • As per the Telecom Act, contributions made by telecom companies towards the Digital Bharat Nidhi will first be credited to the Consolidated Fund of India (CFI).
    • All revenues that the government receives, including loans raised and all money received in repayment of loans, are credited to the CFI. The government also incurs its expenditures from this fund.
    • The Central governement will deposit the collected funds to the DBN from time to time.
  • The funds under DBN is used for
    • Funds collected under the DBN will be used to support universal service through promoting access to and delivery of telecommunication services in underserved rural, remote and urban areas; fund research and development of telecommunication services, technologies, and products; support pilot projects, consultancy assistance and advisory support for improving connectivity; and for the introduction of telecommunication services, technologies, and products.
    • The DBN shall fund schemes and projects for providing targeted access to telecommunication services for underserved groups of society such as women, persons with disabilities and economically and socially weaker sections, as per the draft rules.
  • Administration: The Centre will appoint an “administrator” who will select “DBN implementers” through “bidding” or invitation of applications from eligible persons.
  • This so-called administrator will determine the modalities of providing funding to DBN implementers on a case-by-case basis, including but not limited to full funding, partial funding, co-funding, market risk mitigation, and risk capital.

Q1: What is the objective of the Universal Service Obligation Fund (USOF)?

The objective of the USOF is 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.

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