Sam Pitroda, advisor to the Prime Minister on IT and Infrastructure, has proposed a Rs 13,228 crore project to connect 2.5 lakh panchayats with broadband connectivity.

In a letter to the Prime Minister's Office, Pitroda said the required investment could be drawn from the Universal Service Obligation (USO) Fund, which has sufficient availability of funds.

"USOF has sufficient availability of funds and its mandate permits such use," Pitroda said, adding that a Special Purpose Vehicle (SPV) could be formed for implementing the project.

Pitroda has proposed a detailed framework for connecting the panchayats. He suggested formation of the SPV as a company under DoT, with equity participation from BSNL, Power Grid, RailTel, USOF, CDOT, National Informatics Centre, Ministry of Panchayat Raj.

The SPV should be formed within six months after the approval of the competent authority.

However, the Department of Telecom (DoT), instead of forming the SPV as a corporation with equity participation from different organisations, it should act as the steering committee to oversee the planning and may be dissolved after completion of the project.

DoT has also suggested that BSNL may only be considered as logical choice for execution of the project in order to ensure time bound and seamless execution of the OFC project.

DoT is likely move the proposal to Cabinet for approval.

Outlining, the bottlenecks, Pitroda said that laying of optical fibre requires permissions from various agencies for Right of Way (RoW). Unforeseen delays in getting RoW can cause significant delay in project implementations.