Cabinet clears creation of National Optical Fibre Network

New Delhi: The Union Cabinet on Tuesday approved a scheme for the creation of a 'National Optical Fibre Network' (NOFN) for providing broadband connectivity to village panchayats at an initial cost of over Rs20,000 crore. The scheme will help in offering governance, banking and health services online.

The project aims to extend the existing optical fibre network, which is available up to district and block levels, to the gram panchayat level, by utilising Rs20,000 crore from the Universal Service Obligation (USO) Fund.

A similar amount of investment is likely to be made by the private sector complementing the NOFN infrastructure while providing services to individual users.

A World Bank study says every 10 per cent increase in broadband penetration results in a 1.4 per cent increase in GDP growth.

''The Rs20,000-crore project is likely to be completed in the next two years…the NOFN will also facilitate implementation of various e-governance initiatives such as e-health, e-banking and e-education, thereby facilitating inclusive growth,'' telecom secretary R Chandrashekhar told journalists here.

Initially, the broadband project would be executed by the state-owned Bharat Sanchar Nigam Ltd (BSNL) and other institutions such as RailTel, Power Grid and the Gas Authority of India.

For the implementation and execution, the Cabinet has approved the formation of a special purpose vehicle with equity from the Government of India, Chandrashekhar said.

The proposed NOFN will enable effective and faster implementation of various mission mode e-governance projects amounting to around Rs50,000 crore initiated by the Department of Information Technology as well as the delivery of a whole range of electronic services in the above areas by the private sector to those in rural areas.