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Notes Gs3 Indian economy

Indian Economy: Infrastructure

  • Post author By augu
  • Post date January 29, 2023

The development of infrastructure is a sine qua non of economic development.

Infrastructure

Power or Electricity

India has a rapidly expanding power infrastructure that includes a mix of conventional and renewable energy sources. There are a number of problems in the electricity sector:

  1. Insufficient generation capacity: There is a gap between the demand and supply of electricity in the country, leading to power shortages and load shedding.
  2. The poor financial health of state electricity boards (SEBs): Many SEBs are facing losses due to factors like low tariffs, high transmission and distribution losses, and non-payment of dues by customers.
  3. High transmission and distribution losses: Due to the poor condition of the transmission and distribution network, a significant amount of electricity is lost during transmission and distribution.
  4. Inadequate rural electrification: Many villages in India still do not have access to electricity, and the electrification rate in rural areas is lower than in urban areas.
  5. Dependence on fossil fuels: India is heavily dependent on fossil fuels like coal and oil for power generation, which has negative environmental impacts and is vulnerable to price fluctuations.
  6. Lack of energy efficiency: There is a lack of awareness and incentives for energy efficiency measures, which leads to the wastage of energy.
  7. Non-uniform pricing: Electricity tariffs vary significantly across states, which can lead to market inefficiencies and distortions.

The Electricity Act, of 2013 is an Indian legislation that governs the generation, transmission, distribution, and trading of electricity in the country. It replaced the Electricity Act, of 2003 and aims to promote competition, rationalization of electricity tariffs, and the development of the power sector in a sustainable and socially responsible manner. The Act provides for the establishment of several regulatory bodies such as the Central Electricity Regulatory Commission (CERC), State Electricity Regulatory Commissions (SERCs), and the Appellate Tribunal for Electricity (ATE) to regulate the sector and resolve disputes. It also provides for the establishment of the National Renewable Energy Policy and the National Renewable Energy Fund to promote the development of renewable energy sources in the country. Under the new statuary regime, generation of power is completely delicensed and captive power generation is freely allowed.

Sources of power

  1. Hydel power: The share of hydel power is reduced in India. Its development depends on a lot of factors.
  2. Thermal power: 75% of total power comes from thermal power. mainly coal but it is polluting and exhaustible.
  3. Nuclear power: very little share
  4. RES(renewable energy resources): solar power, wind power, biomass, etc

Ujwal DISCOM Assurance Yojana (UDAY) is a scheme launched by the Government of India in November 2015 to improve the financial and operational performance of power distribution companies (DISCOMs) in India. The scheme aims to reduce the debt burden of the DISCOMs and improve their efficiency through measures such as reducing transmission and distribution losses, improving billing and collection efficiency, and promoting energy efficiency. Under UDAY, state governments take over 75% of the debt of the DISCOMs, and the remaining debt is issued as state-backed DISCOM bonds. The scheme also provides financial incentives to DISCOMs for meeting operational and financial targets.

Coal

Coal is the major source of energy in India. Coal deposits are chiefly found in Jharkhand, Odisha, Chattisgarh, West Bengal, Madhya Pradesh, Andra Pradesh and Maharastra. Government strive to make coal production environment-friendly through the use of modern mining equipment and the restoration of old mines to their original state.

Coal gasification is a process that converts coal into a cleaner-burning gas. The process involves reacting coal with oxygen, steam, and carbon dioxide to produce a gas that can be used for power generation or other industrial purposes. One of the main advantages of coal gasification is that it allows for the capture and storage of carbon dioxide, which can help to reduce greenhouse gas emissions. However, the process can be expensive and requires a significant amount of energy to operate. Additionally, the production of syngas from coal gasification still produces emissions of other pollutants such as sulfur dioxide and nitrogen oxides. The Indian government has launched various initiatives to promote the adoption of coal gasification technology, such as the Coal Gasification Mission, which aims to set up coal gasification projects across the country.

Oil and Gas

Proven oil reserves are very low but the dependence on oil is high in India. This results in huge imports thus a balance of payment crisis and vulnerability to global price fluctuations. Major reforms have taken place in this sector post-independence:

  1. Oil and Natural Gas Commission (ONGC) was established to explore and exploit oil and gas resources in India in 1956
  2. In 1976, the Oil Industry (Development) Act was passed, which led to the nationalization of major oil companies such as IOC, BPCL and HPCL.
  3. Introduction of the New Exploration Licensing Policy (NELP) in 1997, which provided a framework for private and foreign companies to explore and produce oil and gas in India.
  4. Market-determined price for all petroleum products except PDS kerosene and domestic LPG.
  5. Allowing domestic companies to acquire international oil and gas reserves. for instance ONGC Videsh Ltd, GAIL global, etc
  6. Hydrocarbon Exploration and Licensing Policy 2015, to replace NELP, to simplify the process for obtaining exploration and production licenses and to provide a transparent and competitive bidding process.

Hydrocarbon Exploration and Licensing Policy (HELP): It was introduced in 2016 to simplify the process of oil and gas exploration and production, as well as attract more investment in the sector. The policy replaced the previous NELP and introduced a revenue-sharing model between the government and the companies involved in exploration and production. The policy also introduced the Open Acreage Licensing Policy (OALP) which allows companies to choose the blocks they want to explore and produce from, as opposed to the previous system of government allocation. Allowed market-determined prices for petroleum products.

Atomic energy

India’s atomic energy program started in 1948 with the formation of the Atomic Energy Commission. In 1954, the Atomic Energy Act was passed which gave the Atomic Energy Commission the power to carry out research, build reactors and mines, and produce and use atomic energy for peaceful purposes. India conducted its first nuclear test, code-named “Smiling Buddha,” in 1974, which made it the first country outside of the five permanent members of the UN Security Council to possess nuclear weapons. Currently, India’s nuclear power sector generates about 3% of the country’s electricity. Uranium and Thorium are the fuels used in nuclear reactors.

Nuclear fuel cycle: series of processes involved in the production of nuclear power. the steps include:

  1. mining and processing of uranium ore
  2. enriching to increase the concentration of fissile isotopes
  3. the fabrication of fuel rods
  4. the operation of nuclear reactors
  5. the reprocessing of spent fuel
  6. the disposal of nuclear waste

Nuclear Power Corporation of India Limited (NPCIL): a government-owned company that is responsible for the generation of nuclear power for electricity purposes in India. It was created in September 1987 under the Companies Act 1956, and it operates several nuclear power plants across India. NPCIL is a public sector enterprise under the administrative control of the Department of Atomic Energy (DAE). Its headquarters are located in Mumbai, Maharashtra.

Energy strategy

India’s per capita reserves for coal and petroleum are very low compared to US and china. The heavy dependence on energy import will result in volatility and will act as a hindrance towards economic growth and thus economic development.

  1. Accelerated exploitation of domestic conventional energy sources
  2. management of oil demand
  3. substitution of natural gas for oil products
  4. energy conservation
  5. the exploitation of new renewable sources of energy like solar energy, wind energy and biogas
  6. intensification of research and development in emerging energy technologies

The Integrated Energy Policy (IEP) was introduced by the Government of India in 2008 with the objective of providing a long-term roadmap for India’s energy security. The policy aimed to develop a diversified fuel mix that includes coal, oil, gas, nuclear, and renewable energy sources. It also proposed measures for energy conservation and the development of energy-efficient technologies. The IEP laid out a comprehensive strategy for achieving energy security, sustainability, and equity while addressing the challenges of climate change and global warming.

New and Renewable sources of energy

Renewable sources of energy are the second largest power generating sector after coal with nearly 25% of the share as per the data of 2021. 

The National Solar Mission is a major initiative of the Indian Government to promote the development and use of solar energy in the country. The nodal ministry is the Ministry of New and Renewable Energy. It was launched in 2010 and has the goal of installing 100 GW of solar power capacity in India by 2022, which includes 40 GW of rooftop solar and 60 GW of utility-scale solar. The mission also aims to reduce the cost of solar power through various measures such as research and development, domestic manufacturing, and international collaborations.

The Solar Cities program is a government initiative of India launched in 2008, aimed at promoting the use of renewable energy technologies and energy conservation measures in urban areas. The nodal ministry is the Ministry of New and Renewable Energy. The program focuses on developing sustainable models for urban development by adopting solar power and energy-efficient technologies in the areas of electricity generation, transportation, and solid waste management. The program covers 60 cities in India and provides support for project development, capacity building, and financial assistance to city governments, local bodies, and residents for implementing solar and energy-efficient technologies.

Surya Mitra Scheme was launched by the Ministry of New and Renewable Energy (MNRE) of India in 2015 to create skilled manpower in the field of solar energy to meet the growing demand for solar installers and technicians. The scheme aims to train unemployed and underemployed youth, especially those from rural areas and women, as solar entrepreneurs and technicians. The trained Surya Mitras can then provide services related to the installation, operation, and maintenance of solar-powered devices and systems in their local areas and earn a livelihood. The scheme provides training and certification to Surya Mitras and also offers placement support and entrepreneurship opportunities.

The National Offshore Wind Energy Policy was introduced by the Ministry of New and Renewable Energy in 2015 to harness the offshore wind energy potential in India’s territorial waters. The policy aims to facilitate the development of offshore wind energy projects by providing a clear regulatory framework and incentives for project developers. The policy also aims to promote the domestic manufacturing of offshore wind energy equipment and components to boost the country’s manufacturing sector. The policy targets the installation of 5 GW of offshore wind energy capacity by 2022, with a long-term target of 30 GW by 2030.

Indian Railways

Railways are the backbone of the economy. It is the preferred transport for long-distance passengers and freight. During the Five Year Plan, the Indian government has allocated significant funds to the Indian Railways for infrastructure development, modernization, and expansion. These funds have been used for the construction of new rail lines, electrification of existing lines, upgradation of signalling and telecommunication systems, and procurement of new rolling stock. Indian railway operates in three gauges - Broad gauge, meter gauge and narrow gauge. Broad gauge is the largest and preferred and other gauges are being converted to broad gauge. 

Problems and issues

  1. Inadequate network capacity and infrastructure
  2. High freight rates cross-subsidies the low passenger rates. High freight rates result in high prices of transport goods creating inflationary conditions in the economy.
  3. highly congested routes affecting both freight and passenger.
  4. There is a common corridor for both freight and passenger traffic. So speed is reduced for all.
  5. Pending projects are cost over-runs and political pressure urges to start new projects, but end in despair
  6. Underinvestment results in network congestion and associated problems
  7. High competition with road and airways
  8. Use of older technology and low research and development in terms of sufficiency and efficiency
  9. Corruption, delay related to strikes, lower capacity utilisation

Road Transport

Roads are generally classified into National, State, District and Rural roads.

The National Highways Development Project (NHDP) is a project initiated by the Government of India to upgrade, rehabilitate, and widen major highways in India. The project was launched in 1998 and is being implemented by the National Highways Authority of India (NHAI). The NHDP consists of several phases, with each phase focusing on a specific aspect of highway development. The project aims to improve connectivity and reduce travel time across the country by constructing high-quality, multi-lane highways, expressways, elevated corridors, and the creation of a national highway grid.

Pradhan Mantri Bharat Jodo Yojana, also known as PM Gram Sadak Yojana (PMGSY), is a flagship rural road development scheme launched by the Government of India in 2000. PMBJP deals with linking up major cities to the NHDP highways. The PMGSY addresses rural roads. The aim of the scheme is to provide all-weather road connectivity to unconnected and under-connected rural areas. Under the scheme, rural roads are constructed and upgraded to connect villages with towns and cities, as well as to provide access to schools, hospitals, and markets. The PMGSY is implemented by the Ministry of Rural Development and is funded by both the central and state governments.

Bharatmala Pariyojana is a centrally-sponsored and funded road and highways project of the Government of India, aimed at improving the efficiency of the country’s road network and reducing the logistics cost of the transport sector. The project involves the construction of about 83,677 kilometres of new highways, economic corridors, inter-corridor routes, feeder routes, and border and coastal roads, with an investment of around Rs. 5.35 lakh crore. It was launched in October 2017 by the Ministry of Road Transport and Highways.

Problems in the road infrastructure development

  1. Build-Operate-Transfer(BOT)-annuity schemes are manipulated to get more money than rational for the contractors
  2. Viability Gap Funding - the amount that the NHAI gives to the contractor to complete the road is going beyond rationale.
  3. over-engineering causes a great loss of resources and finances.
  4. cartels of contractors operating to get the contract for high bids.

railways and road transport are complementary to each other. but road transport has more advantages than railways and railways ended up being the loser in the competition. road transport is more flexible but railways are cheap. both transport systems are important and should be viewed in an integrated way.

Water transport

Water transport can be broadly divided into inland and shipping

Inland water transport

India has got about 14,500 km of navigable waterways. however, there are navigational inadequacies such as:

  1. Insufficient infrastructure: The infrastructure for inland water transport in India is not well-developed, and there is a lack of adequate navigational aids, terminals, and other facilities required for efficient operation.
  2. Limited connectivity: The inland water transport system in India is not well-connected, and many of the waterways are not navigable throughout the year due to low water levels, which limits their usefulness for transportation.
  3. Environmental issues: The development of inland waterways can have adverse environmental impacts, such as altering river ecosystems, increasing the risk of flooding, and polluting waterways.
  4. Inefficient operations: The current inland water transport system in India is not efficient, which makes it less competitive with other modes of transportation. There are issues with vessel design, inadequate maintenance of vessels and infrastructure, and limited use of technology.
  5. Regulatory challenges: There are various regulatory challenges associated with inland water transport, such as complex and fragmented regulatory frameworks, which make it difficult to operate efficiently and attract private investment.

The Inland Waterways Authority of India (IWAI) is a statutory body created in 1986 under the Inland Waterways Authority of India Act, 1985 for the regulation and development of inland waterways for shipping and navigation. It is headquartered in Noida, Uttar Pradesh and operates under the Ministry of Ports, Shipping and Waterways. The main objective of the IWAI is to develop the national waterways for shipping and navigation and to provide a safe, economical and efficient mode of transportation for both passengers and goods.

The National Waterways Act, 2016 is an act passed to declare 111 waterways as national waterways.

Jal Marg Vikas Project (JMVP) is a project for the development of National Waterway-1 (NW-1) between Haldia and Varanasi (1390 km) for capacity augmentation of navigation on the Ganga river. It is being implemented at a cost of Rs 5369.18 crore with the technical assistance and investment support of the World Bank. The Project is expected to be completed by March 2023. The project aims to enable commercial navigation of at least 1500-2000 ton vessels on NW-1, which would provide an alternative mode of transport that is environment-friendly and cost-effective. The project will also contribute to reducing the logistics cost in the country and generating socio-economic benefits for the people living along the waterway.

The major components of the project are:

  • Fairway development through dredging, river training works, bank protection works, and provision of navigational aids.
  • Construction of three multi-modal terminals at Varanasi, Sahibganj and Haldia with cargo handling facilities and rail/road connectivity.
  • Construction of two inter-modal terminals at Kalughat and Ghazipur with cargo handling facilities and road connectivity.
  • Construction of a new navigation lock at Farakka to allow passage of large vessels through the Farakka barrage.
  • Provision of a River Information System (RIS) and Vessel Traffic Management System (VTMS) for safe and efficient navigation.
  • Construction of five pairs of Roll on-Roll off (Ro-Ro) terminals to facilitate the movement of vehicles across the river.
  • Construction of Integrated Ship Repair and Maintenance Complexes at Haldia and Varanasi to provide repair and maintenance services for vessels operating on NW-1.

The project is expected to generate direct employment for about 46,000 people and indirect employment for about 84,000 people in various sectors such as vessel construction, cargo handling, terminal operation, etc.

Shipping

coastal shipping

Coastal shipping in India is the movement of cargo and passengers along the Indian coastline by sea without crossing an ocean. It is a mode of transport that has several advantages over other modes, such as:

  • It is cheaper, faster, safer and more environment-friendly than road or rail transport for long distances
  • It reduces congestion and pollution on land and helps in decongesting the major ports
  • It promotes regional development and integration by connecting the coastal states and hinterland areas.
  • It enhances national security and strategic interests by strengthening maritime domain awareness.

Coastal shipping in India has a huge potential as India has a long coastline of 5,560 km with 11 major and 168 minor/intermediate ports. However, it currently accounts for only 6% of the total modal mix of cargo transport in India, compared to 12% in China and 40% in Europe.

Some of the challenges faced by coastal shipping in India are:

  • Lack of adequate infrastructure and connectivity at ports and hinterland areas.
  • High cost of operations due to multiple taxes, duties, fees and charges imposed by various authorities.
  • Low availability and high cost of coastal vessels due to limited shipbuilding capacity and cabotage restrictions. Cabotage restriction is a term that refers to the limitation or prohibition of foreign vessels or aircraft from transporting goods or passengers between two points within a country’s territory.
  • Low awareness and preference among shippers and customers for coastal shipping due to reliability and service quality issues

India’s cabotage law under the Merchant Shipping Act, of 1958, restricted foreign-flagged vessels from carrying cargo or passengers between Indian ports unless they obtained a license from the Director General of Shipping. This was done to promote the development of Indian shipping and coastal trade. However, in 2018, India relaxed its cabotage law for certain types of cargo and containers to boost its transhipment potential and reduce its dependence on foreign ports.

The Sagarmala project is a national initiative to enhance the performance of the country’s logistics sector by unlocking the potential of waterways and coastlines. The project aims to promote port-led development, coastal economic zones, coastal community development and maritime security. The objective is to reduce logistics costs for both domestic and EXIM cargo with optimized infrastructure investment. The project entails investing ₹ 8.5 trillion to set up new mega ports, modernize India’s existing ports, develop 14 coastal economic zones and 111 coastal economic units, enhance port connectivity via road, rail, multi-modal logistics parks, pipelines and waterways and generate around 10 million direct and indirect jobs.

The Sagarmala project is the flagship programme of the Ministry of Ports, Shipping and Waterways and is implemented through four pillars:

  • Port Modernization & New Port Development: This involves capacity expansion and modernization of existing ports as well as the development of new greenfield ports to meet the growing demand for maritime trade.
  • Port Connectivity Enhancement: This involves improving the connectivity of ports with the hinterland through road, rail, inland waterways and coastal routes. It also includes developing multi-modal logistics parks and freight corridors to enable the efficient movement of cargo.
  • Port-led Industrialization: This involves developing industrial clusters and parks near ports to attract investments and promote manufacturing and export-oriented activities. It also includes developing coastal economic zones along the coastline to boost economic growth and employment.
  • Coastal Community Development: This involves promoting the sustainable development of coastal communities through skill development, livelihood generation, fisheries development, coastal tourism and maritime security.

Some of the initiatives taken by the Sagarmala project for coastal shipping and inland shipping are:

  • Providing financial assistance for developing dedicated coastal berths and infrastructure at ports.
  • Relaxing the licensing and tax structure for foreign flag vessels and special vessels such as RO-RO, RO-PAX, etc. to carry coastal cargo.
  • Providing priority berthing policy and discounts on vessel and cargo related charges for coastal vessels at major ports.
  • Reducing GST on bunker fuel from 18% to 5% for coastal vessels.
  • Developing coastal shipping services for passengers and tourism.
  • Encouraging the use of inland waterways and multimodal transport for coastal shipping.
  • Developing national waterways and providing financial assistance for infrastructure development, vessel procurement, fairway development, terminal construction, etc.
  • Developing multimodal terminals at Varanasi, Sahibganj and Haldia on National Waterway 1 (Ganga) under Jal Marg Vikas Project.
  • Developing Ro-Ro ferry services across various locations such as Dahej-Ghogha, Hazira-Ghogha, etc.

Overseas shipping

Some of the challenges faced by overseas shipping in India are:

  • Lack of adequate infrastructure and connectivity at ports and hinterland areas. This includes insufficient berthing facilities, cargo handling equipment, storage space, dredging, etc. for overseas vessels as well as poor road, rail and waterway linkages for inland vessels.
  • High cost of operations due to multiple taxes, duties, fees and charges imposed by various authorities on overseas vessels. This includes GST, customs duty, port charges, tolls, etc. which increase the cost of overseas shipping compared to other modes of transport.
  • Low availability and high cost of overseas vessels due to limited shipbuilding capacity and cabotage restrictions. India has a shortage of suitable vessels for overseas shipping, especially for containerized cargo. The cabotage law restricts foreign-flagged vessels from carrying domestic cargo between Indian ports unless they obtain a license.
  • Low awareness and preference among shippers and customers for overseas shipping due to reliability and service quality issues. Many shippers and customers are unaware of the benefits of overseas shipping or perceive it as slow, unsafe or unreliable. They also face issues such as lack of standardization, documentation, coordination, etc. among various stakeholders involved in overseas shipping.

Port location in India is influenced by various geographical factors, such as:

  • The shape and size of the coastline. India has a long and irregular coastline of about 7,517 km, which offers many natural harbours and sheltered bays for port development. The west coast of India has a straight and rocky coastline with few indentations, while the east coast has a wide and plain coastline with many deltas and estuaries.
  • The depth and width of the continental shelf. The continental shelf is the submerged extension of the landmass that slopes gently seaward from the shore. It provides a shallow and stable platform for port construction and navigation. The width and depth of the continental shelf vary along different parts of the Indian coastline. The west coast has a narrow and steep continental shelf, while the east coast has a wide and gentle continental shelf.
  • The tidal range and currents. The tidal range is the vertical difference between high tide and low tide levels at a given location. It affects the water depth and accessibility of ports. The currents are the horizontal movements of water caused by various factors such as wind, temperature, salinity, etc. They affect the speed and direction of vessels as well as sedimentation and erosion at ports. The tidal range and currents vary along different parts of the Indian coastline. The west coast has a high tidal range (up to 11 m) and strong currents, while the east coast has a low tidal range (up to 2 m) and weak currents.
  • The climatic conditions and natural hazards. The climatic conditions such as temperature, rainfall, humidity, wind, etc. affect the operational efficiency and safety of ports. Natural hazards such as cyclones, storms, floods, tsunamis, etc. pose risks to port infrastructure and vessels. The climatic conditions and natural hazards vary along different parts of the Indian coastline. The west coast has a hot and humid climate with moderate rainfall, while the east coast has a tropical climate with heavy rainfall. The west coast is less prone to cyclones than the east coast

Air transport

The Airport Authority of India (AAI) is a public sector enterprise that was formed in 1995 by merging the International Airports Authority of India (IAAI) and the National Airports Authority of India (NAAI). The AAI works under the Ministry of Civil Aviation and provides air traffic management services over the Indian airspace and adjoining oceanic areas. The AAI also operates more than 100 airports across the country, including 34 international airports and 10 customs airports. The AAI also conducts recruitment for various posts in its organization.

Ude Desh ka aam nagrik (UDAN) is a regional connectivity scheme launched by the Ministry of Civil Aviation in 2016 as a part of the National Civil Aviation Policy (NCAP). The main objective of the scheme is to develop the regional aviation market and provide affordable air travel to the common citizens in small towns and remote areas. The scheme also aims to operationalise 100 unserved and underserved airports and start at least 1,000 air routes across the country. UDAN stands for Ude Desh ka Aam Nagarik, which means “letting the common citizen of the country fly”. It also aims to make air travel affordable and widespread by capping the fares at Rs. 2500 per seat per hour for half of the seats on each flight. It is jointly funded by the central government and state governments, several states have signed a Memorandum of Understanding (MoU) with the union government for this scheme.

National Civil Aviation Policy (NCAP) is a government policy that was approved by the Union Cabinet on 15 June 2016. The policy aims to create an ecosystem that enables safe, sustainable, affordable and accessible air travel and cargo transportation in India. The policy covers various aspects of civil aviation such as regional connectivity, airport development, air cargo, air navigation services, helicopter operations, maintenance and repair organisations, flying training institutes and ground handling services. The policy also sets some targets such as increasing domestic ticketing to 30 crores by 2022 and 50 crore by 2027; increasing international ticketing to 20 crores by 2027; increasing cargo volumes to 10 million tonnes by 2027; creating an aviation hub in India; and enhancing the ease of doing business through deregulation and simplified procedures. The policy enhances the air navigation services by implementing GPS-Aided Geo Augmented Navigation (GAGAN) system; modernizing communication, navigation and surveillance systems; implementing performance-based navigation procedures; establishing an independent regulatory body for ANS providers; and developing a National Airspace Management Plan (NAMP).

Communications

Telecom Regulatory Authority of India is an independent statutory body established by the Telecom Regulatory Authority of India Act, 1997 Act of Parliament to regulate telecom services, tariffs, quality of service and consumer protection in India. TRAI is an independent statutory body that does not work under any ministry. However, it advises the government on policy matters related to telecom. The Ministry of Communications is responsible for formulating policies and programmes for the development of telecommunication services in India. 

Some of its functions include:

  • Issuing licenses to telecom service providers
  • Laying down standards of technical compatibility and interconnection
  • Ensuring compliance with universal service obligations
  • Protecting the interests of consumers and service providers
  • Promoting competition and efficiency in the telecom sector
  • Advising the government on policy matters related to telecom

BharatNet is a project of national importance to establish a highly scalable network infrastructure accessible on a non-discriminatory basis, to provide on-demand, affordable broadband connectivity of 2 Mbps to 20 Mbps for all households and on-demand capacity to all institutions, to realise the vision of Digital India. BharatNet is also known as Bharat Broadband Network Limited (BBNL), which is a central public sector undertaking, set up by the Department of Telecommunications.

The project aims to connect all the 2.5 lakh gram panchayats in the country and provide 100 Mbps connectivity to all gram panchayats (GPs) by using an optimal mix of underground fiber, fiber over power lines, radio and satellite media. The project is funded by the Universal Service Obligation Fund (USOF), which was set up for improving telecom services in rural and remote areas of the country. The project is implemented in partnership with states and the private sector.

BharatNet is the world’s largest rural broadband connectivity program, which is built under the Make in India initiative with no involvement of foreign companies. It is expected to facilitate the delivery of e-governance, e-health, e-education, e-banking, Internet and other services to rural India.