The Cabinet Wednesday cleared the long-pending compensation of Rs 1,250 crore for public sector telecom company BSNL to support rural landline connections installed before April 1, 2002.
The subsidy will be given to the state-run firm after an amendment in the Indian Telegraph Rules (ITRs), 1951.
“The Cabinet approves subsidy of Rs 1,250 crore to BSNL as compensation for deficit incurred by BSNL in operating rural wireline connections,” said Frank Noronha, the government’s principal spokesperson, on Twitter.
The BSNL subsidy support will be given from the Universal Service Obligation Fund (USOF) for the rural connections installed prior to April 1, 2002, he added.
The telecom operator had asked the government to provide Rs 2,000 crore to support rural wireline connections.
On the basis of the submission from BSNL and the detailed information in respect of working rural wireline connections installed before April 1, 2002, the deficit per rural wireline connection was estimated at Rs 4,876 for 2011-12.