Wi-Fi hotspots will be installed in 1,050 villages over the course of 2017.

Internet connectivity has seen a meteoric rise in India in recent years thanks to the proliferation of low-cost 3G- and 4G-enabled phones and wide rollout of data services. India's internet users are in excess of 450 million, and while that number is second only to China's 750 million, a mere 34% of the population is connected to the internet. In a bid to boost connectivity in rural areas, the Indian government has announced that it introduce free Wi-Fi hotspots in over 1,000 villages.

Dubbed Digital Village, the government has earmarked 423 crores ($62 million) for the initial phase of the project, which will be carried out over the next six months. The move is the latest in a series of initiatives taken up by the government to boost internet usage in rural areas. In 2011, the government introduced a five-year plan to roll out fiber optic cable to over 250,000 villages with the National Optic Fibre Network project, providing broadband access to millions of people. However, at the end of 2016, the government was able to connect just over 60,000 villages.

Providing basic internet access is the first step toward a cashless economy.

With the broadband initiative taking longer than usual, the government is now looking at Wi-Fi hotspots as a way to bridge last-mile connectivity. In a statement to Economic Times, Aruna Sundararajan, Secretary of the Ministry of Electronics and Information Technology, said:

The project is a public/private partnership, and will be driven through the common service centres (CSCs). We'll be partnering with different service providers to do it.

We are looking at all options. We're looking at a major WiFi push, which need not necessarily be only fibre optic but taking connectivity from the nearest place using WiFi to reach remote villages while fibre can take a little more time.

The country's demonitisation push — which invalidated 86% of the currency in circulation — has led to an impetus in the adoption of digital payments and mobile wallets. The first step in going cashless is providing basic internet access, and with Digital Village, the government is doing just that.

This isn't the first initiative aimed at providing free internet access to those in India. Facebook rolled out its Free Basics program in 2015, but it was eventually banned by the country's telecom regulator for violating net neutrality laws. Free Basics was available to customers on a single carrier — Reliance — and Facebook had final control over the apps that would be allowed in the service.

Facebook is now tying up with local carriers and internet service providers to "help expand connectivity" to rural areas with its new Express Wifi service. Unlike Free Basics, Express Wifi is a paid service, through which customers will be able to buy "fast, reliable and affordable data" to access the internet.

Google is also collaborating with the government's RailTel project to offer free Wi-Fi at train stations across India. Public Wi-Fi is now available at over 100 railway stations, and Google will be bringing the service to over 400 stations over the course of the year.