DIGITAL BHARAT NIDHI (Syllabus: GS Paper 3 – Economy)

News-CRUX-10     8th July 2024        
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Context: The Department of Telecommunications (DoT) has unveiled draft rules for implementing the Digital Bharat Nidhi, aiming to bolster telecom connectivity in rural India as part of the government's renewed efforts.


Digital Bharat Nidhi

  • About: 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).
  • Objective: The primary aim of DBN is to enhance and extend internet connectivity across India, with a specific focus on rural, remote, and economically disadvantaged urban areas.
  • Transformation of USOF: The DBN initiative marks a shift from the Universal Service Obligation Fund (USOF) to redirect resources towards improving accessibility and reach of phone services nationwide.

How the Digital Bharat Nidhi will work

  • Contributions and Consolidated Fund of India: Telecom companies' contributions are initially credited to the Consolidated Fund of India (CFI), where all government revenues and expenditures are managed under the Telecom Act.
  • Depositing Funds to DBN: The Centre periodically deposits collected funds into the Digital Bharat Nidhi (DBN) account.
  • Funding Modalities: Administrators decide funding types like full, partial, co-funding, market risk mitigation, and risk capital for DBN implementers.
  • Targeted Groups: DBN funds schemes targeting underserved groups: women, persons with disabilities, and economically weaker sections.
  • Project Criteria:

o Projects funded by DBN must focus on:

o Next-generation telecom technologies

o Affordable services in rural, remote, and urban areas

o Innovation, research, and indigenous technology development

o Start-up encouragement in telecom sector

Universal Service Obligation Fund (USOF)

  • Aim: To provide for quality and affordable mobile and digital services across the rural and remote areas of the country.
  • Headed by: Administrator, USO Fund who is appointed by the Central Government, for the administration of the fund.
  • Origin of Concept: Introduced by Rowland Hill in 1837 with his postal reforms. 
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