Pre-poll sop: After work, MNREG scheme to offer 2.5 cr mobile phones too

Written by Priyadarshi Siddhanta | priyadarshi siddhanta | New Delhi | Updated: Sep 27 2013, 13:56pm hrs
MNREGA-phoneThe free mobile handsets will provide the last mile banking network to rural India.
The UPA government would soon hand out internet enabled free mobile handsets with SIM cards to 2.5 crore beneficiaries of the Mahatma Gandhi National Rural Employment Guarantee programme as a pre-poll sop. Women heads of households who have completed at least 25 days of work under the flagship scheme will get a preference under the proposal mooted by the ministry of communications.

The proposal has been vetted by the Telecom Commission, the highest decision making body of the department of telecommunications and would be soon put up before the Cabinet. State-run BSNL has been selected to roll out the project. The mobiles will provide the last mile banking network to rural India. RBI Governor Raghuram Rajan has just announced plans to allow telecom firms to provide banking on the move to rural India. People will be able to withdraw money from their mobile accounts, a facility the RBI has been sitting on under previous governor D Subbarao. So the mobile sets provide the platform to run his ambitious agenda.

Apart from the devices, the proposal seeks to offer free recharge amounting to Rs 360 each year for two years. This will include talk-time of 30 minutes, 30 SMS and 30 MB data package for internet usage. Arguing the case a government note says urban teledensity in March 2013 was about 147 per cent compared to rural tele-density of 41 per cent. As such rural tele-density remains a challenge. The scheme is likely to cost the exchequer Rs 4,850 crore for four years, which would be funded from the Universal Services Obligation Fund (USOF) to which the telecom service companies contribute to.

The ministry of communications has argued that the scheme would ensure enormous social and economic empowerment to people bridging the digital divide. It argues that while most of the villages have mobile coverage, the high cost of mobile phone and services means those are not within the affordable range of a large segment of rural households. Yet an improved telecom access helps reduce transaction costs through faster access to information that increases income and improves the quality of life, the note argues.

The selection of the beneficiaries would be done by the state governments and only one beneficiary per household, preferably women would be eligible for the largesse. The proposal envisages that the handsets would support 2G voice, SMS and GPRS services at pre-defined voice quality. Each district would have a customer service centre to. The handsets would carry a three-year warranty period. Of the total 2.5 crore beneficiaries, 25 lakh would be distributed handsets in the first year, 50 lakh in the second year, 75 lakh in the third year and one crore in the final year. Indicating that the roll out would be free of financial constraints, the proposal says the money would be drawn from the USOF fund which has a corpus of Rs 27,949 crore.

Selection of benefiaries to be done by the state governments

* Only one beneficiary per household would be eligible

* Benefiaciaries would be women, for each eligible household unless the household does not have a woman member

* MNREGS beneficiaries who have availed the scheme for not less than 25 days or not below the state average will be eligible


The Multi-dimensional Index of Backwardness by the Raghuram Rajan panel has scored 28 states on 10 criterion. Doing away with the special category status, it said, states with a score of over 0.6 are least developed. While all states should get a fixed 0.3% of funds, additional funds would be given on need and performance.

Rank State Score

Least Developed (>0.6)

1 Orissa 0.8

2 Bihar 0.77

3 Madhya Pradesh 0.76

4 Chhattisgarh 0.75

5 Jharkhand 0.75

6 Arunachal Pradesh 0.73

7 Assam 0.71

8 Meghalaya 0.69

9 Uttar Pradesh 0.64

10 Rajasthan 0.63

Less Developed (0.4-0.6)

11 Manipur 0.57

12 West Bengal 0.55

13 Nagaland 0.55

14 Andhra Pradesh 0.52

15 Jammu and Kashmir 0.5

16 Mizoram 0.5

17 Gujarat 0.49

18 Tripura 0.47

19 Karnataka 0.45

20 Sikkim 0.43

21 Himachal Pradesh 0.4

Relatively Developed (<0.4)

22 Haryana 0.4

23 Uttarakhand 0.38

24 Maharashtra 0.35

25 Punjab 0.35

26 Tamil Nadu 0.34

27 Kerala 0.1

28 Goa 0.05