Every panchayat (village or town council) in India may soon be connected to a broadband network, thanks to a government initiative. It is a part of the Bharat Nirman (Build India) program, a flagship project of the UPA government to improve the infrastructure in villages. The program aims at reaching 40 percent rural tele-density within the next five years.

The government’s plans were announced by President Pratibha Patil at a joint sitting of the two houses of the new parliament this year. She said, “The scheme for common centers or e-kiosks will be suitably repositioned to be a network of panchayat-level Bharat Nirman Service Centres to provide government services to the citizens in rural areas.”

Funds are already lined up for the broadband services to villages. The telecom department plans to use the Universal Service Obligation Fund (USFO) for providing connectivity to villages. Since 2002, the telecom operators have been paying five percent of their annual revenues to this fund, and so far the unutilized amount in this fund has crossed Rs 25,000 crore. The telecom minister A. Raja says, “We will bring out a new USO policy where this fund can be used for other telecom related services such as broadband and for laying fiber optics cables.”

Meanwhile, the telecom major BSNL has started rolling out subsidized wire-lined broadband connectivity to rural and remote areas. An agreement has already been signed between the department of telecommunication and BSNL to provide 861,459 connections to individual users and government institutions over a five-year period. The rural broadband connectivity will cover Citizen Service Centres, gram panchayats (village councils) as well as public health centers.

Other players like Reliance are also tapping into the rural broadband market. In Gujarat, the gram panchayats already have broadband connectivity because of the e-gram initiative of the government, which has roped in Bharti Airtel to set up VSATs in 13,693 villages.