To push the rural telephony in the country the government is working on plans to provide subsidy directly to the users in the rural areas. The proposed subsidy will be given from Universal Services Obligations (USO) fund.

The Prime Minister’s office in this regard is believed to have written a letter to the Department of Communications (DoT) to start working on modalities to give it a practical shape.   

Last year fund held over Rs 20,000 crore as corpus, its annual utilisation has always been less than Rs 2,000 crore and the government feels that it would be a better idea to utilise this fund to increase rural teledensity.

As per the Planning Commission proposal a rural subscriber would get 20 percent subsidy on a bill less that Rs. 300. Besides this, the rural subscriber will get one-time subsidy of Rs. 250 on the new connection.

While telecom service providers contribute a fixed 5 per cent of their adjusted gross revenues as a levy towards the USO fund, the government also allocates money for the fund set up in 2002.

According latest figures released by TRAI subscription in rural areas increased from 308.81 million to 310.86 million by the end November 2011 with the rural teledensity increasing from 36.76 to 36.98.The government feels that it would be a nice idea to give it further boost.