India's free mobile phone plan faces opposition

Finance ministry to object to giving free mobile phones to households below country's poverty line, saying government cannot afford it and should focus on more pressing issues such as power shortages.

India's finance ministry will oppose plans to provide a mobile phone to every family below the poverty line in the country, arguing the government does not have the financial resources to do so.

According to a report by the Times of India on Saturday, the Prime Minister's Office is reportedly evaluating the plan to dole out phones to over 70 million households, along with 200 minutes of free local talk time.

However, one unnamed ministry official said in the report that the government cannot afford the scheme. Assuming each handset costs INR 1,000 (US$18.09), the total cost of the program would come up to about INR 70 billion (US$1.3 billion), the official noted.

The Times of India added that other reports have suggested the government could tap the Universal Service Obligation Fund to pay for the program. But another finance ministry official pointed out the fund is meant to increase teledensity in rural areas whereas the free mobile phone scheme would straddle both urban and rural areas.

An unnamed official from the Department of Telecommunications said the free mobile handset scheme was not suggested by them, and the team was not consulted on it.

A Congress leader also criticized the plan, saying the government's priority should be to address more serious issues such as power shortages in the country. India in late July experienced two massive power outages, after its power networks which serve over 680 million people went down for a time.

"What use is a mobile if there is no electricity to charge it? It would seem insensitive to go ahead with something like this, especially when the government says there is no money to fund its food security plans," the leader said in the report.