The government is likely to announce the creation of a separate Universal Services Obligation Fund during Budget 2003-04.
The USO fund, which is now a part of the Consolidated Fund of India, is only a notional one with no clarity on the amount.
Senior government officials have said the finance ministry may agree to create the USO fund following the Department of Telecommunications' demand that it be kept out of the Consolidated Fund of India.
Once such a fund is created its control will shift to the communications ministry from the finance ministry.
The government has set up a USO fund administrator under the ministry of communications. How can he carry out his functions if the size and the availability of the fund is not known? asked a government official.
Meanwhile, the USO fund administrator is going ahead with the bidding process to provide support to existing village phones.
The draft tender document has been issued and the final tender document for inviting bids will be issued next week after incorporating comments from the industry.
Initially, bids are being invited for covering the operational expenses of existing village phones. Since a huge investment will be needed to meet the capital and operational expenses for new village phones, it will be taken up in the next phase only.
The fund administrator may also give incentives to operators who perform well but that would depend on the size of the kitty and future availability of funds.
As per the USO guidelines issued by the government, 5 per cent of the annual revenues from telecom services will go towards the USO fund.
