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It has been estimated that every 10% increase in broadband connectivity leads to 1.38% increase in Gross Domestic Product(GDP). The expansion of broadband in India has not kept pace with the growth seen in mobile telephony. Broadband penetration in India is far from satisfactory limit.Panchyats are the constitutionally managed 3rd tier of Government and key institutions for local self government in the rural areas.Coverage of Panchyats with Broadband Internet Connectivity has a great potential for empowering rural masses by giving them access to information, public services including those of education, health and financial inclusion.
Keeping in view of above Government of India has approved on 25-10-2011 for the setting up of National Optical Fiber Network (NOFN) to provide connectivity to 2.5 lakh Gram Panchayats of the country using optical fiber, which would ensure broadband connectivity with adequate bandwidth. This is to be achieved utilizing the existing optical fiber and extending it to the Gram Panchayats and Bharat Broadband Network Limited (BBNL), is a special Purpose Vehicle (SPV), PSU set up under companies act by Govt of India under Rule 1956 has been registered on Feb 25, 2012 for management and Operation of NOFN.