Government lines up Rs 10,000 crore subsidy for mobiles, tablets in rural areas

NEW DELHI: The government is set to spend Rs 10,000 crore to give away 2.5 crore mobile phones at subsidised prices in rural areas and 90 lakh tablets free of cost to class XI and XII students across government schools, as it continues efforts to woo voters ahead of upcoming state and national elections.

The Congress-led coalition government plans to charge Rs 300 for a mobile phone which will be bundled with a monthly recharge of Rs 30 for a period of two years, according to an internal government document reviewed by ET.

The recharge will entitle the user to 30 minutes of airtime, 30 SMSes and 30 Mbps usage a month.

A separate document shows that the free tablets will come with 75 minutes talk time, 75 SMSes and 500 MB of data usage. For any usage beyond the prescribed limit, the beneficiary will have to pay. The objective of the tablet scheme is to empower the higher secondary students of XI and XII, the telecom department highlighted in the document.


The two projects will be funded through the universal services obligation fund (USOF), which is accumulated through an annual levy on mobile phone operators. The cash-rich USOF currently has a corpus of close to Rs 28,000 crore and gets around Rs 6,500 crore in contribution from telecom operators each year.

The proposals have been finalised and are expected to become operational after ratification by the Telecom Commission — the highest decision-making body in the telecom department — and then the Cabinet.

The two schemes have been spread over four years and two years, respectively.

New Delhi will give out 25 lakh mobile phones in the first year, 50 lakh in the second, 75 lakh in the third and the rest in the fourth. For tablets, it’s 15 lakh in the first year.

State-run BSNL will be the executing agency, which will select the mobile phone and tablet manufacturer on the basis of competitive bidding, the two documents showed.

Both the projects will be implemented by state governments, which are tasked with identifying the beneficiaries as defined by the central government. The central government schools will be directly handled by the national government.

While the mobile phone scheme hopes to provide a phone “preferably” to a woman member of a household falling under the Mahatma Gandhi National Rural employment Guarantee Programme (MNREGA), at least a minimum of 30% beneficiaries should be women members, the project design said. Only MNREGA beneficiaries, preferably having “Aadhar” will be eligible, the project brief specified.

Once implemented, these would be the latest sops the government is planning to woo a population, leading up to general elections which could be held early next year. This scheme would come close on heels of a food aid programme, the National Food Security Law, which aims to distribute cheap grains to nearly three fourths of India's 1.2 billion people.