The cabinet Tuesday cleared a scheme for creating a National Optical Fibre Network (NOFN) for providing broadband connectivity to panchayats that is likely to boost rural employment.

The scheme will also facilitate electronic services including e-education, e-health and e-agriculture and reduce the migration of rural population to urban areas.

"The cost of this initial phase of the NOFN scheme is likely to be about Rs..20,000 crore. A similar amount of investment is likely to be made by the private sector complementing the NOFN infrastructure while providing services to individual users," an official note said.

"The objective of the scheme is to extend the existing optical fibre network to the gram panchayat level," it added.

So far the optical fibre network was available up to the district level.

By facilitating implementation of these services, the scheme will also lead to inclusive growth besides providing high bandwidth connectivity for electronic delivery of services to citizens.

According to a study conducted by the World Bank, with every 10 percent increase in broadband penetration, there is an increase in the gross domestic product growth by 1.4 per cent.