industries manufacturing & service sectors section 1 MCQ Questions & Answers Detailed Explanation

Answer: (c)

Apart from the higher capital cost of providing telecom services in rural and remote areas, these areas also generate lower revenue due to lower population density, low income and lack of commercial activity.

Thus, normal market forces alone would not direct the telecom sector to adequately serve backward and rural areas. Keeping in mind the inadequacy of the market mechanism to serve rural and inaccessible areas on one hand and the importance of providing vital telecom connectivity on the other, most countries of the world have put in place policies to provide Universal Access and Universal Service to ICT.

The New Telecom Policy (of India)- 1999 (NTP'99) provided that the resources for meeting the Universal Service Obligation (USO) would be raised through a 'Universal Access Levy (UAL)', which would be a percentage of the revenue earned by the telecom operators under various licenses.

The Universal Service Support Policy came into effect from 01.04.2002. The Indian Telegraph (Amendment) Act, 2003 giving statutory status to the Universal Service Obligation Fund (USOF) was passed by both Houses of Parliament in December 2003.

USOF is under the Dept. of Telecommunication, Ministry of Communication and is being used to connect villages in rural areas under the BharatNet project. USOF provides widespread and non-discriminatory access to quality ICT services at affordable prices to people in rural and remote areas.

It provides an effective and powerful linkage to the hinterland thereby mainstreaming the population of rural and remote parts of the country. It ensures that universal services are provided in an economically efficient manner.

It also ensures that by developing hitherto unconnected areas, the benefits of inclusive growth are reaped by our nation, bringing in its wake rapid socio-economic development and improved standards of living.