The Union Cabinet on Wednesday accorded approval for the second phase of BharatNet broadband programme to connect all 250,000 gram panchayats in the country, extending the target deadline to March 2019, official sources said.

The approval entails a total estimated expenditure of Rs 42,068 crore for the implementation of BharatNet, which will be funded from the government's Universal Service Obligation Fund (USOF).

Out of this amount, Rs 11,148 crore is for providing connectivity to one lakh gram panchayats in Phase 1, and Rs 18,792 crore is for providing connectivity to the remaining 1.5 lakh gram panchayats in Phase 2, the sources added.

The balance amount will cover costs of last mile connectivity architecture, operation and maintenance, and replacement of BSNL's poor quality fibre being used in the project between block to gram panchayat, with new fibre.

Under the modified strategy, implementation of the project is open for states, public sector as well as private companies.

The government aims to provide minimum 100 Mbps broadband connectivity to all gram panchayats by using an optimal mix of underground fibre, aerial fibre, radio and satellite media.

"The modified implementation strategy of BharatNet project will enable effective and faster implementation of various mission mode e-governance projects of central government and state governments," the source said.

Economic benefits from the project are expected through additional employment, e-education, e-health, e-agriculture, and reduction in migration of rural population to urban areas.