NEW DELHI: In what could turn out to be its calling card for the 2014 general elections, the government is finalizing a Rs 7,000 crore scheme to give one mobile phone to every family living below the poverty line.

Sources in the PMO said the scheme—Har Hath Mein Phone—expected to be announced by PM Manmohan Singh on August 15, will not only aim to give away mobiles to around six million BPL households, but also provide 200 minutes of free local talk time.

Top government managers involved in formulating the scheme want to sell it as a major empowerment initiative of the UPA 2 . While the move will ensure contact with the beneficiaries of welfare programmes worth thousands of crores, there is also a view the scheme will provide an opportunity for the UPA to open a direct line of communication with a sizable population that plays an active role in polls.

The scheme may be funded from the telecom department's universal service obligation (USO) funds. According to a source, 50% of the cost is likely to come from the bidder who gets the right to provide the service and the remaining from the USO fund. The fund is meant to be used to meet USO aims by providing access to phone services to people in rural and remote areas at affordable prices. The resources for its implementation are raised through a service levy fixed at 5% of the adjusted gross revenue of all telecom service providers except the pure value added service providers like internet, voice mail, email etc.

According to estimates, the scheme will involve a monthly expenditure of Rs 100 per cellphone. The government is also exploring the possibility of getting service charges subsidized through competitive bidding.

The PMO is directly involved with the Planning Commission and telecom ministry in giving a final shape to the scheme. The government has already launched a national infrastructure initiative under the PM's advisor Sam Pitroda that aims to link 2,50,000 panchayats across the country within 16 months through internet so that basic communication facilities can be provided to the rural masses.