The Planning Commission is exploring such a possibility and the scheme may be announced in the Prime Minister`s Independence Day address next week.
Asked about reports about the populist scheme, Planning Commission Deputy Chairman Montek Singh Ahluwalia told PTI, "we are exploring that possibility. We are are working on an idea. The basic idea is that in rural areas, we need to incentivise access to mobile telephony".
He said a small group in the commission has been working on the idea with the Department of Telecommunications to assess how beneficial the plan would be.
Ahluwalia said while "we don`t actually have a scheme which is approved, it is an idea which is being discussed".
If implemented, this will be UPA-II government`s biggest populist announcement on the lines of Rs 60,000 crore loan waiver scheme for farmers during the tenure of UPA-I.
There are 6.52 crore BPL families which may be entitled to free mobile phones along with monthly connectivity of about 200 minutes. This may cost the government around Rs 7,000-8000 crore per annum.