Sandeep Joshi

NEW DELHI: The Comptroller and Auditor General (CAG) of India has indicted the Department of Telecom (DoT) and the Administrator of the Universal Service Obligation (USO) Fund for the tardy progress in increasing rural tele-density in the country and poor utilisation of funds.

Pointing towards some major deficiencies in utilisation and management of the USO Fund, CAG report said: “During 2002-03 to 2006-07, only Rs.5,081.44 crore, or 33.87 per cent of USO Fund, had been utilised out of total funds of Rs.14,998.98 crore collected from service providers, indicating that DoT and USO Fund Administrator failed to adopt aggressive strategies for expanding rural telephony.” The USO Fund was created in 2002 by the Ministry of Communications and Information Technology to provide telecom services to people in rural and remote areas at reasonable prices,

The CAG report tabled in the Parliament also said: “Despite phenomenal growth and expansion in telecom sector in the country, the pace of expansion of telecom services in rural India, particularly in the states of Bihar, Chhattisgarh, Madhya Pradesh, Assam, Jammu and Kashmir, Uttar Pradesh and West Bengal has been very slow and the tele-density in these states ranged merely between 0.88 to 1.81 per cent per hundred population. This indicated that the objectives of establishing the USO Fund exclusively for accelerating growth of rural telephony were not achieved despite substantial collection of funds through Universal Access Levy (UAL),” it pointed out.

The report also said the amounts collected through UAL have not been credited fully to the USO Fund. The balance under the Fund at the end of each financial year was nil, indicating that the funds were diverted/used for purposes other than fulfilling USO. Similarly, subsidy of Rs.1,850.77 crore was paid retrospectively towards rural household direct exchange lines (RDELs) installed during April 2002 to March 2005 without ensuring that the amount was disbursed only through eligible RDELs.

It also stated that liquidated damages of Rs.20.60 crore were not recovered from the service providers for non-fulfilment of roll out obligations even in the extended period, while excess payment of subsidy worth Rs.9.25 crore towards village public telephones made to service providers was not recovered.

“The USO Fund Administrator failed to monitor quality of service parameters in rural areas. Large number of operations in rural areas did not meet the minimum quality standard prescribed by the Telecom Regulatory Authority of India (TRAI),” the report added.