To enhance inclusive growth in the country and strengthen the economic activity in rural areas, India has decided to take up a mega-project worth $400 million to connect all the villages called the National Optical Fiber Network for Broadband connectivity of Panchayats.
The scheme will extend the existing optical fiber network which is available up to district / block HQ's level to the Gram Panchayat level initially by utilizing the Universal Service Obligation Fund (USOF). The cost of this initial phase of the NOFN scheme is likely to be about Rs.20, 000 crore.
A similar amount of investment is likely to be made by the private sector complementing the NOFN infrastructure while providing services to individual users.
In economic terms, the benefits from the scheme are expected through additional employment, e-education, e-health, e-agriculture etc. and reduction in migration of rural population to urban areas.
A recent World Bank study said with every 10 percent increase in broadband penetration, there is an increase in GDP growth by 1.4 percent. NOFN will also facilitate implementation of various e-governance initiatives such as e-health, e-banking and e-education, thereby facilitating inclusive growth.
It will also provide high bandwidth connectivity for electronic delivery of services to citizens. The proposed NOFN will enable effective and faster implementation of various mission mode e-governance projects amounting to approx. Rs.50,000 crore ($10 billion) initiated by Department of Information Technology as well as delivery of a whole range of electronic services in the above areas by the private sector to citizens in rural areas.