What is Digital Bharat Nidhi?

July 8, 2024

India’s Department of Telecommunications (DoT) released draft rules for the Digital Bharat Nidhi (DBN) on July 4. The goal is to improve and expand efforts to connect people to the Internet, especially in rural, remote, and poor urban areas. This plan changes the current Universal Service Obligation Fund (USOF) by moving money to help make phone services more accessible and broad.

What is the Universal Service Obligation Fund (USOF)?

The USOF was created in 2003 to improve telecom services in parts of the country that don’t make a lot of money. It is funded by a 5% tax on telecom operators’ adjusted gross revenue (AGR). Even though it brought in a lot of money, the fund was often criticized for not being used enough. For example, the government says that only about 72% of the Rs 41,740 crore received between 2017 and 2022 was used. This caused the budget to be changed and cut in FY23 because of poor results, especially in projects like the BharatNet one.

Transition to Digital Bharat Nidhi (DBN)

By switching from the USOF to the DBN, the government hopes to fix problems from the past and make assets stretch further. Besides continuing to enhance rural telecom services, the 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.

Operational Framework

According to the new proposed rules, telecom companies will first put their payments into the Consolidated Fund of India. The DBN will then get money from this fund. The operational model calls for choosing an administrator to manage the fund and hiring DBN implementers through bidding or direct applications. These implementers will carry out different projects according to DBN rules, with a focus on providing services openly and fairly for everyone.

Funding and Distribution Methods

The administrator will decide on a case-by-case basis how to pay for things. There may be choices for full, partial, and co-funding and ways to lower risks. This customized method should make it easier to deal with different connectivity problems in different places and work more efficiently.

Goals and Impact

The DBN is meant to do more than just expand telecom services. It’s also meant to make the telecom industry a better place for technology innovation and new businesses to start up. It wants to break new ground by using cutting-edge technologies and setting up regulatory sandboxes where new ideas can be tested in a safe setting. India’s telco sector will also be more competitive on the world stage thanks to its focus on standardization and international compliance.

« Previous Post Next Post »