Union Budget 2026-27 Telecom Allocation Moderates, BSNL Support Strengthened

Telecom Budget Reflects Shift from Headline Spending to Targeted Support

The Union Budget 2026–27 has earmarked Rs 73,990.94 crore for the Department of Telecommunications (DoT) , signalling a calibrated approach to telecom spending. While the overall allocation is lower than the previous year’s Budget Estimate, the revised outlay underscores the government’s intent to prioritise public sector-led telecom infrastructure revival , with a strong focus on Bharat Sanchar Nigam Limited (BSNL) .

Budget Trends: Moderation with Strategic Expansion

The FY27 allocation is 8.65% lower than the FY26 Budget Estimate of Rs 81,005.24 crore , reflecting moderation in fresh headline expenditure. However, it marks a substantial 38.56% increase over the FY26 Revised Estimate of Rs 53,398.17 crore .

This jump is primarily driven by enhanced capital infusion into BSNL , aimed at stabilising the company’s finances and accelerating its network expansion programme.

Role of the Universal Service Obligation Fund

Budget documents indicate that the total net telecom allocation for FY27 rises to Rs 80,927.94 crore when additional support from the Universal Service Obligation Fund (USOF) is included. An amount of Rs 6,937 crore will be channelled through the fund to finance:

• Compensation to telecom service providers

• Expansion of the BharatNet rural broadband initiative

• Research and development in telecom technologies

This structure reflects continued reliance on USOF as a key instrument for bridging digital gaps.

BSNL Revival at the Core of Telecom Strategy

The government has placed BSNL at the centre of its telecom revival agenda. Union Minister for Communications Jyotiraditya Scindia stated that BSNL’s average revenue per user (ARPU) has increased by nearly 9% , rising from around Rs 90 to Rs 99 , with an explicit target of surpassing Rs 100 .

The capital support, combined with BSNL’s internal cash flows, will be utilised for:

• Payment of spectrum-related costs

• Network rollout and modernisation

• Expansion of towers and fibre infrastructure

This signals a shift towards strengthening BSNL’s long-term operational sustainability.

BharatNet and Rural Digital Infrastructure

A portion of the enhanced allocation is also directed towards BharatNet , India’s flagship rural broadband programme. Funds will support fibre expansion, infrastructure upgrades, and last-mile connectivity, particularly in underserved regions.

The approach indicates a consolidation of public sector telecom capabilities while maintaining momentum in rural digital inclusion and national connectivity goals.

Exam-Focused Key Points

• Rs 73,990.94 crore allocated to the Department of Telecommunications in FY27