New Delhi to give 6 million mobile phones to the poor ahead of election

New Delhi plans to spend HK$9.7b on scheme to boost rural mobile connections ahead of election

PUBLISHED : Friday, 17 August, 2012, 12:00am
UPDATED : Friday, 17 August, 2012, 4:12am

Bicycles, rice, saris, alcohol, blenders and televisions are some of the freebies that Indian politicians have given to voters at election time. Now it is mobile phones.

The government plans to distribute more than 6 million mobile phones for free to families below the poverty line, along with 200 minutes of free call time.

Costing some 70 billion rupees (HK$9.7 billion), the objective behind the 'A Mobile in Every Hand' scheme is to boost mobile phone connections in rural areas.

"We need more connections in remote areas so that we can make sure government services such as banking and other information about welfare benefits can reach the poor," said an official of the Planning Commission, where the idea was conceived.

Of the 950 million mobile phone subscribers in India, only some 35 per cent are in rural areas.

Very few of India's state-owned banks have branches in rural areas because opening and running a branch is not cost-effective, given that only small transactions are likely to be carried out.

This leaves millions of Indians without a bank account and unable to accept or transfer money.

The government has been thinking for some time that the best way of providing banking in rural areas is to skip physical banks altogether and go straight into mobile banking. This way, impoverished people could transfer and receive money through text messages.

Critics of the scheme have pointed out that many of the new phone owners may find it difficult to keep their devices charged.

More than 300 million Indians have no electricity. Last month, the world's biggest power outage left 600 million Indians without power and paralysed the country.

"Unless the government also hands out free generators, I can't see how the phones will be recharged, so they'll be junk," said telecom analyst Priyanka Kochhar in New Delhi.

Even the country's major telecommunications companies have to use diesel-run generators to keep their towers running because of the frequent power cuts. The main opposition party, the Bharatiya Janata Party, called the idea a 'cruel joke' played on people who did not have enough food or shelter.

"Elections are coming in 2014 and this is nothing more than a gimmick," said BJP leader Shahnawaz Hussain.

"Why doesn't the government tackle real issues like rising food prices which are really hurting people instead of indulging in this nonsense?"

Hussain, however, conceded that some freebies have proved beneficial. For example, the Bihar government's policy of giving a free bicycle to girls in poor families to ensure they go to school has been a huge success. But a free mobile, said Hussain, was like giving a beggar a Mercedes.