August 10, 2022
Cabinet approval for BharatNet project, Rs.  19,041-crore viability gap, to be implemented in 16 states

Telecom Minister Ravi Shankar Prasad said the cabinet on Wednesday approved the public-private partnership mode for the rollout of the BharatNet project for broadband services in villages across 16 states, with a viability gap of Rs 19,041 crore.

Prasad said the decision to include private players was taken after Prime Minister Narendra Modi announced on August 15, 2020, that around 6 lakh villages in the country would be connected to broadband in 1,000 days.

“The Cabinet has in principle approved the implementation of BharatNet in 16 states in the Public Private Partnership model with a total outlay of Rs 29,430 crore. The Government of India will spend only Rs 19,041 crore viability gap fund,” Prasad said. he said. Sharing the details of the cabinet decision.

The 16 states are- Kerala, Karnataka, Rajasthan, Himachal Pradesh, Punjab, Haryana, Uttar Pradesh, Madhya Pradesh, West Bengal, Assam, Meghalaya, Manipur, Mizoram, Tripura, Nagaland and Arunachal Pradesh.

Prasad said that so far 1.56 lakh out of 2.5 lakh gram panchayats have been connected with broadband.

“The PPP model will be implemented in 3.61 lakh villages in 16 states of India,” Prasad said.

The cabinet has also given in-principle approval to expand BharatNet to cover all inhabited villages in the remaining states and union territories, an official statement said.

“The Department of Telecommunications will work out the modalities for these (remaining) states/UTs separately,” the statement said.

The minister said that there will be a 30-year agreement with private companies and the entire project will be divided into nine packages.

Prasad said, “No player will get more than four packages.

He said that one package corresponds to the telecom circle area.

“If you calculate 30 years OPEX and CAPEX, it comes out to around Rs 95,000 crore if the Indian government had executed it. In comparison, the government was setting up this architecture to fund a viability gap of Rs 19,041 crore. It is,” Prasad said.

Viability gap fund is provided in case a unit faces a loss for executing a project. The difference between the cost of running a project and the actual revenue realization is provided through the Viability Gap Fund.

The minister further said that broadband access in rural areas will improve e-governance, tele-medicine, online education and entrepreneurship will flourish.

Earlier this week, Finance Minister Nirmala Sitharaman had said that an additional Rs 19,041 crore fund would increase the total outlay for the BharatNet project to Rs. 61,109 crores.

Sitharaman had said Rs. 42,068 crore has already been utilized to reach out to 1,56,223 gram panchayats which are now ready for broadband services by 31st May.

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