Govt To Roll Out Rs17,000 Crore Rural Household Electrification Scheme

Govt To Roll Out Rs17,000 Crore Rural Household Electrification Scheme

In a fresh push to universalize electricity access, the National Democratic Alliance (NDA) government plans to roll out a Rs17,000 crore scheme.

Aimed at providing electricity access to every rural household, the scheme named Sasti Bijli Har Ghar Yojana may target around 40 million unelectrified households.

Not only will this bring the NDA closer to delivering on its promise to improve energy access, it will also generate fresh demand for electricity in the country—the lack of which is weighing down the entire power sector.

Power minister Piyush Goyal has stated his focus on providing power connections to each and every household of every village.

Around 304 million Indians live without access to electricity.

“This is the next step after village electrification under the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), wherein all households will be targeted. The scheme will entail an outlay of around Rs17,000 crore,” said a government official aware of the scheme but requesting anonymity.

A village is declared to be electrified if 10% of the households are given electricity along with public places such as schools, panchayat office, health centres, dispensaries and community centres.

According to the NDA government’s 2015 plan, 18,452 un-electrified villages will be electrified by 1 May 2018. Of these, only 3,458 villages remain to be electrified, with 966 being uninhabited villages.

“It has been seen that the electricity distribution companies (discoms) don’t want to supply to the villages even if the electrification has taken place. By providing electricity access to all village households with meters, demand will be created which in turn will force the discoms to supply to these villages, thereby helping reach the goal of electricity to all,” said another person aware of the plan who also didn’t want to be named.

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This also comes at a time when the centre and states are working for electricity tariff slab rationalization to make them uniform across the country, which will help in reduction of cross-subsidies and make tariffs more competitive.

“Electricity will become cheaper as the inefficiencies built into the tariff will be reduced. Going forward this (scheme) will also help in leveraging electricity for induction cooking,” said the second person cited above.

The government is trying to resolve the issue of stressed assets in the power sector with the hope that if all goes as per plan, these stressed assets will start generating power to feed a rise in demand from the rural electrification drive, Ujwal Discom Assurance Yojana (UDAY) and the nation’s economic growth.

The need for household electrification has also found traction with government think tank NITI Aayog.

“Studies have revealed that in spite of major strides made by the earlier schemes in providing connections and now, DDUGJY, the problem of electricity ‘access’ did not improve appreciably. An inherent challenge in the process is ensuring the coverage of households as opposed to only villages. Several states with high electrification rates still have poor household electrification, and certain hamlets, not covered in the national sample surveys and the DDUGJY, are also without access to energy,” the think tank stated in its new draft energy policy.

Experts termed the proposed scheme to be a game-changer.

“Connecting these consumers is going to be transformative for the economy, generate demand, bolster financial health of the sector, utilities and equipment players, effectively reducing cost of energy per consumer, and bringing in much desired integration of these citizens into the mainstream of the energy grid,” said Sambitosh Mohapatra, partner, power and utilities at PwC India.

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Queries emailed to the power ministry spokesperson on 19 July remain unanswered.

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