Expressing concern over low tele-density in the country, the Finance Minister Chidambaram said Rs 1,700 crore (Rs 17 billion) was granted to the universal service obligation fund last fiscal.
An amount of Rs 1,200 crore is being allocated to it this year.
BSNL would provide VPT connections to remaining 66,822 villages in the next two years, with 520,000 VPTs being installed already.
Finance Minister P Chidambaram announced the Union Budget 2005-06 in Parliament on Monday.