State-owned Bharat Sanchar Nigam Limited (BSNL) has defended its decision to sharply reduce its estimated requirement for funds under Digital Bharat Nidhi (DBN)-funded projects in FY27, after the Department of Telecommunications (DoT) questioned the repeated downward revisions. BSNL said delays in project execution, right-of-way constraints, deferred milestone payments, supply-chain disruptions and litigation have reduced the amount it realistically expects to draw during the current financial year.
The dispute centers on a significant reduction in BSNL’s projected DBN funding requirement. The company initially estimated that it would need ₹25,985 crore in FY27, but the requirement was subsequently revised downward four times between April and July, eventually reaching ₹5,910 crore. DoT has raised concerns that such frequent changes point to shortcomings in budget planning, while BSNL maintains that the revisions reflect genuine operational circumstances rather than poor estimation.
BSNL Cuts FY27 Funding Requirement to ₹5,910 Crore
BSNL’s estimated requirement for DBN-funded schemes has fallen dramatically since the beginning of FY27.
The figures moved as follows:
| Stage | Fund Requirement |
|---|---|
| Initial BSNL estimate | ₹25,985 crore |
| After DBN rationalisation | ₹22,220 crore |
| First revision | ₹12,000 crore |
| Second revision | ₹10,400 crore |
| Third revision | ₹8,839 crore |
| Latest estimate | ₹5,910 crore |
The Ministry of Finance had allocated ₹24,000 crore in the FY27 Budget Estimates for DBN-funded schemes and projects, including ₹20,000 crore for capital expenditure and ₹4,000 crore for revenue expenditure.
DoT Questions Repeated Downward Revisions
The DoT has expressed concern about the frequency and scale of the revisions.
The department argued that repeated changes in projected requirements could indicate insufficient diligence in estimating and planning budgetary requirements. It also warned that such changes could disrupt the achievement of physical and financial targets for telecom infrastructure projects.
The issue is particularly important because DBN funding supports projects intended to expand connectivity in underserved areas, including major rural broadband initiatives.
BSNL Says Project Delays Reduced Cash Requirements
BSNL has rejected the suggestion that the lower estimate reflects poor planning.
The company said several external and largely unforeseeable developments changed the timing of expenditure during FY27.
Among the factors cited were:
- Four project implementation agencies began work later than scheduled.
- Mobilisation advances for two project packages could not initially be released because contractual conditions had not been fulfilled.
- Milestone-based capital expenditure claims have not yet matured.
- Invoices for completed work have yet to be submitted in some cases.
- Right-of-way restrictions delayed optical fibre deployment.
- Litigation by unsuccessful bidders delayed project commencement.
BSNL said these factors changed the timing of liabilities rather than eliminating the underlying projects.
Around 40,000 Route-Km of Fibre Already Laid
Despite the lower spending requirement, BSNL said substantial physical progress has already been made.
The company stated that approximately 40,000 route-kilometres of optical fibre cable (OFC) have been laid under the relevant projects. However, payments linked to some of this work have been deferred because milestone claims have not yet matured and invoices have not been submitted by project implementation agencies.
This distinction is important because a reduction in expenditure during a particular financial year does not necessarily mean that the physical scope of the programme has been reduced.
Right-of-Way Constraints Delay Fibre Rollout
BSNL also identified right-of-way, or RoW, restrictions as a significant obstacle.
The company specifically cited difficulties in Kerala, Karnataka and Goa, where restrictions have slowed optical-fibre deployment and consequently pushed related expenditure into later periods.
Such delays can affect both the pace of broadband expansion and the timing of payments to contractors.
Supply-Chain Disruptions Add to Project Delays
BSNL also pointed to geopolitical disruptions affecting the availability of telecom infrastructure materials.
According to the company, the Israel-US-Iran conflict has disrupted global supply chains for materials and equipment including:
- High-density polyethylene (HDPE) ducts.
- Optical fibre cable.
- Routers.
BSNL said shortages and price increases have slowed project execution and, in some cases, contributed to force-majeure conditions.
The company also cited litigation involving unsuccessful bidders as another factor that created uncertainty and delayed work by successful bidders.
BSNL Says Programme Scope Has Not Changed
One of BSNL’s key arguments is that the lower funding requirement should not be interpreted as a reduction in the scope of the Amended BharatNet Programme or other DBN-funded projects.
The company said its original FY27 estimates were based on the implementation schedules and expenditure profiles approved by the Cabinet. The latest figure, it argued, represents the amount it now realistically expects to draw during FY27 based on actual project progress.
BSNL described its decision to promptly communicate the lower requirement as prudent financial management rather than a failure in planning.
Why the Dispute Matters
The disagreement highlights the challenge of accurately budgeting large-scale telecom infrastructure programmes in an environment where construction schedules, government clearances, supply chains and contractual disputes can change rapidly.
For the government, accurate projections are important because unused allocations can affect the deployment of public funds and the scheduling of infrastructure projects.
For BSNL, however, requesting funds significantly ahead of actual expenditure could result in unnecessary allocation of public money. The company therefore argues that revising its requirement as project conditions change is financially responsible.
Key Issues
| Issue | BSNL’s Position | DoT’s Concern |
|---|---|---|
| Lower funding requirement | Reflects actual project conditions | Indicates weak initial planning |
| Project delays | Caused by external factors | Could disrupt targets |
| OFC deployment | Around 40,000 route-km laid | Spending must align with progress |
| Supply chain | Global disruptions affected execution | May affect project timelines |
| Programme scope | No reduction in scope | Repeated revisions create uncertainty |
Looking Ahead
The sharp reduction in BSNL’s FY27 Digital Bharat Nidhi funding requirement highlights the gap between planned expenditure and actual project execution. While DoT has questioned the repeated downward revisions, BSNL maintains that the changes are the result of delayed project starts, contractual conditions, right-of-way constraints, supply shortages and litigation rather than deficiencies in its original planning.
Looking ahead, the key issue will be whether the delayed expenditure eventually translates into faster physical progress and timely completion of BharatNet and other DBN-funded projects. With substantial optical fibre already laid but payments and additional deployment delayed, the government will likely focus on improving project execution, resolving RoW and contractual bottlenecks, and ensuring that future funding estimates more closely match the actual pace of work.
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