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Business News/ Politics / Policy/  NDA unveils plan for Digital India
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NDA unveils plan for Digital India

Cabinet also approves an increase in mineral royalty rates, restores minimum onion export price to $350 a tonne

The government is already working on the Rs20,000 crore National Optical Fibre Network (NOFN) that aims to connect all 250,000 gram panchayats in the country with high-speed broadband by 2017. Photo: Hindustan TimesPremium
The government is already working on the Rs20,000 crore National Optical Fibre Network (NOFN) that aims to connect all 250,000 gram panchayats in the country with high-speed broadband by 2017. Photo: Hindustan Times

New Delhi: The cabinet on Wednesday cleared the government’s blueprint for Digital India, as promised by Prime Minister Narendra Modi in his Independence Day speech last week.

The plan will be implemented in stages and ultimately connect the remotest parts of the country. It will serve as a medium for providing healthcare and education. And it is envisaged as a governance tool that will allow people to easily access government facilities, fill forms, submit applications, and even register births and deaths.

“Youth belonging to the IT (information technology) profession have paved the way for establishing India’s new identity in the world. Digital India is our dream for the nation. When I say digital India, it is not meant for the rich but for those who are poor," Modi said in first speech as Prime Minister. “E-governance is easy governance, effective governance and also economic governance."

The government is already working on the 20,000 crore National Optical Fibre Network (NOFN) that aims to connect all 250,000 gram panchayats (or local administrative bodies at the village level) in the country with high-speed broadband by 2017. To be sure, this was the brainchild of the previous United Progressive Alliance (UPA) government.

After taking charge of the country in late May, the National Democratic Alliance headed by Modi has sought to explore how best this network can be used.

On 7 August, Modi held a meeting on the design of Digital India, the sweeping programme that encompasses all citizen-focused digital initiatives. The programme has been envisaged by the department of electronics and information technology.

It will be funded through budgetary provisions of respective ministries in the Union or state governments. The umbrella programme will restructure and synchronize existing schemes and also involve public-private partnerships wherever possible.

Mineral royalty

The cabinet also approved an increase in the royalty rates for key minerals in the country, the first such hike since 2009. Mineral-rich states, including Orissa, Chhattisgarh and Jharkhand, have been requesting an increase in royalty rates. While states collect the royalties, the rates are decided by the Union government. The revisions are based on the recommendations of a study group set up by the previous government in 2011. There are 51 minerals prescribed in the second schedule of the Mines and Minerals (Development and Regulation) Act 1957 and royalty rates vary by mineral. Minerals such as iron ore, bauxite, limestone, zinc and copper will now have new royalty rates.

The previous UPA government had set up a committee in 2011 to examine the demand of the states in increasing the royalty rates. In its report submitted in 2013, the panel recommended increasing the rates to compensate the mineral-rich states for permitting the offtake of minerals by end-use industries. Currently, the royalty rates are on an ad valorem basis, which is computed as per the pit-mouth value of minerals by the Indian Bureau of Mines. Though the revision in royalty rates is to be made every three years, the previous government did not make the revision that was due in 2012.

Nagpur Metro

The cabinet also earmarked 8,680 crore for a mass rapid transport system for the city of Nagpur. Addressing a press briefing, law minister Ravi Shankar Prasad said a special purpose vehicle will be created for this project with 50% contribution each from the government of India and the government of Maharashtra. The cabinet approved setting up of Nagpur Metro Rail Corporation to execute the 38.215km-long Nagpur Metro project.

The proposed project will have two corridors, the north-south corridor covering approximately 19.65 km from Automotive Square to MIHAN, and the east-west Corridor covering approximately 18.55km from Prajapati Nagar to Lokmanya Nagar, said a press statement.

The total project cost is 8,680 crore, with government of India contributing 1,555 crore in the form of equity and subordinate debt.

“Nagpur is developing into a big city," Prasad said.

Nagpur City, the 13th largest urban conglomeration in India, has employment of about 600,000 having a travel demand of total 2.2 million passenger trips every day, the release said.

Coincidently, Nagpur is the Lok Sabha constituency of Union cabinet minister for road transport, highways and shipping Nitin Gadkari, who also hold the additional charge of the ministry of rural development, drinking water and sanitation and panchayati raj. It is also the headquarters of the Rashtriya Swayamsewak Sangh, the ideological parent of the Bharatiya Janata Party, which heads the coalition that rules in New Delhi.

Onion exports

The government restored the minimum export price (MEP) of onion to $350 per tonne, citing plentiful supply. The MEP for onion was increased to $500 per tonne through a cabinet decision on 2 July in a bid to control inflation.

India exports about 1.5 million tonnes of onions a year. “One would like to see stability in policy. This kind of ad hoc decision making does not send the right signals for the international market nor does it provide stability in prices for the farmers," said Himanshu, assistant professor, Jawaharlal Nehru University. He is also a Mint columnist.

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Updated: 20 Aug 2014, 11:13 PM IST
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