Viability gap fund for Bharat Net project

• Union Cabinet chaired by Prime Minister Narendra Modi approved for revised implementation strategy of BharatNet under Public Private Partnership mode.
• It will be implemented through Public-Private Partnership (PPP) model with a total cost of Rs.29,430 crores.
• Of this, the Government will provide the viability gap fund of Rs.19,041 crores.

The revised BharatNet Project:

• It would be Implemented across 16 States of India i.e, Kerala, Karnataka, Rajasthan, Himachal Pradesh, Punjab, Haryana, Uttar Pradesh, Madhya Pradesh, West Bengal, Assam, Meghalaya, Manipur, Mizoram, Tripura, Nagaland, and Arunachal Pradesh.
• The project which initially aims to connect all the gram panchayats of the country through optic fiber for providing broadband services,

Now it will have two new components:

1. BharatNet will now extend up to all inhabited villages beyond Gram Panchayats (GPs).
2. Revised strategy also includes creation, upgradation, operation, maintenance and utilization of BharatNet by by the private sector partner who will be selected by a competitive international bidding process.

• The project will be divided into nine packages, each corresponding to one or more telecom circles, and no private investor will be awarded more than four packages to avoid monopoly.

Viability gap fund:

• Viability Gap Finance means a grant to support projects that are economically justified but not financially viable.
• It is provided as a capital subsidy to attract the private sector players to participate in PPP projects that are otherwise financially unviable.
• The VGF scheme was launched in 2004 to support PPP projects.

BharatNet project

• It is a flagship mission implemented by Bharat Broadband Network Ltd (BBNL).
• BharatNet Project is basically the National Optical Fibre Network (NOFN) that was launched in 2011.
• It was renamed as BharatNet project in 2015.
• The BharatNet Project aims to facilitate the delivery of e-governance, e-health, e-education, e-banking, Internet and other services to rural India.
• It has to cover all 2.5 lakh Gram Panchayats.