After work, MNREG scheme to offer mobile phones too

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SummaryCentre to hand out cell phones with SIM cards to 2.5 crore beneficiaries

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

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