An increase in disbursement from USOF can be attributed to BSNL’s Rs 30,000 crore 4G saturation project to connect about 30,000 villages.
After failing to meet the Budget target to provide connectivity to rural and remote areas for the last six financial years, the government’s expenditure from the Universal Service Obligation Fund (USOF) is expected to be at an all-time high in FY24, officials said.
In fact, in the run up to the interim Budget for 2024-25, the department of telecommunications (DoT) has revised the expenditure estimates from the USO fund to Rs 15,000 crore in FY24, 44% higher than the Rs 10,400 crore estimated earlier for the year, officials said.
An increase in disbursement from USOF can be attributed to BSNL’s Rs 30,000 crore 4G saturation project to connect about 30,000 villages; BharatNet project for fiber connectivity, which will also include advance payments for the phase-3 project implementation; ongoing projects to provide connectivity to Andaman and Nicobar Islands and Lakshadweep; viability gap funding to telecom operators, among other projects, officials said.
The 4G saturation project was announced in July 2022 and was expected to be completed in 2023, but its execution has been slow. As on date, the disbursement for the same has been around Rs 7,000 crore, officials said, adding that BSNL has been able to complete foundational work on around 10,000 tower sites out of 19,000 sites across the villages, which are yet to get 4G connectivity.
The USO fund, whose name has been changed to Digital Bharat Nidhi in the new Telecom Act, was constituted in 2003. The fund is being used to promote access to telecom services in underserved rural, remote and urban areas to bridge the digital divide. Lately, its scope has been extended to support research and development and introduction of telecom services, technologies, and products through the Telecom Technology Development Fund (TTDF).
As of December 31, 2023, the government’s disbursements from USOF was at Rs 7,630 crore, which is more than double of Rs 3,500 crore that the government had spent in FY23. The balance in the USOF as of December end was at Rs 77,113 crore, according to the government data. Disbursement of Rs 8,548 crore in 2008-09 from USOF has been the highest so far in the last 21 years.
Over the next three years, owing to the Rs 1.39 trillion BharatNet phase-3 project and the BSNL 4G saturation project, among key projects, the spending from the USOF is expected to increase to Rs 70,000 crore. For FY25, the Budget expenditure estimates from the USOF is expected to be at Rs 20,000 crore, officials said.
The government is also expected to increase allocation for research and development from TTDF to about Rs 3,000-4,000 crore going forward. Currently, telecom operators pay about 8% of the adjusted gross revenue (AGR) dues to the government. Of the 8% AGR dues, 5% goes to USOF and 3% goes towards licence fee.
In the expenditure budget, the government shows three items under the USOF head. One is the allocation for the BharatNet project and the other is compensation to telecom operators, also known as viability gap funding, for creating infrastructure in rural and far-flung areas, and maintenance of village communication infrastructure. In FY23, the revised estimates also show fund allocation for R&D (research and development).
Till FY23, data suggests that the government’s BharatNet spending has been slow. In FY18, the actual expenditure was 38.5% less than the Budget estimate of Rs 10,000 crore, whereas in FY19 and FY20, the actual expenditure was 47.2% and 71.2% less than the Budget estimates of Rs 8,175 crore and Rs 6,000 crore, respectively. In FY21, the expenditure on BharatNet from the USOF was Rs 5,919.8 crore, 1.3% less than the Budget estimate of Rs 6,000 crore. In FY22, however, the expenditure was Rs 7,510 crore, as against the Budget estimate of Rs 7,000 crore for that year.
In FY23, the revised estimates again suggested a near 79% fall in the spending for the BharatNet project to Rs 1,500 crore. The Budget expenditure estimate from USOF for FY23 was Rs 9,000 crore, and out of that the government only spent Rs 3,500 crore.
Source:financialexpress.com