Telecommunications Minister Ravi Shankar Prasad (Ravi Shankar Prasad) said that the cabinet on Wednesday approved a public-private partnership model to launch BharatNet broadband service projects in villages in 16 states, with a feasibility gap of Rs 19,041 crore.

Prasad said that after Prime Minister Narendra Modi announced on August 15, 2020 that about 600,000 villages in the country will be connected to broadband within 1,000 days, he decided to involve private participants.

“The Cabinet approved in principle the implementation of BharatNet in 16 states in a public-private partnership model, with a total cost of 29,430 crore. The Indian government will only spend 19,041 crore on the feasibility gap fund,” Prasad said while sharing the cabinet’s decision detail.

The 16 states are-Kerala, Karnataka, Rajasthan, Himachal Pradesh, Punjab, Haryana, Uttar Pradesh, Madhya Pradesh, West Bengal, Assam , Meghalaya, Manipur, Mizoram, Tripura, Nagaland and Arunachal Pradesh.

Prasad said that so far, out of 250,000 village committees, 156,000 village committees have been connected to broadband.

“The PPP model will be implemented in 361,000 villages in 16 states in India,” Prasad said.

An official statement stated that the Cabinet also approved in principle the expansion of BharatNet to all inhabited villages in other states and federal territories.

The statement said: “The Ministry of Telecommunications will separately develop models for these (remaining) countries/regions.”

The minister said that a 30-year agreement will be signed with a private company and the entire project will be divided into nine packages.

“No player will get more than four packages,” Prasad said.

He said that a package corresponds to a telecom area.

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“If you calculate 30 years of operating expenditure and capital expenditure, then if the Indian government executes it, it will be approximately Rs 95,000 crore. In contrast, the government is establishing this structure to provide the feasibility of Rs 19,041 crore. Gap funding,” Prasad said.

If the entity faces losses during the execution of the project, it will provide viable gap funding. The gap between project operating costs and actual revenue realization is provided through feasibility gap funding.

The Minister further stated that broadband access in rural areas will improve e-government, telemedicine, online education and develop entrepreneurship.

Earlier this week, Finance Minister Nirmala Sitharaman had stated that an additional 19,041 crore fund would increase the total expenditure of the BharatNet project to Rs. 61,109 million.

Sitharaman once said the rupee. As of May 31, 42,068 crore has been used to reach 1,56,223 grams of panchayats, which are now ready to provide broadband services.