Towards ‘power for all’

Towards ‘power for all’

Provisioning of continuous and quality power supply to more than 250 million households (families) in the country is indeed a great challenge. Though electricity falls under the concurrent list of the Indian constitution, the Union Government has taken up this challenge as an opportunity to get connected with every citizen. Various developmental measures in the power sector have been undertaken during the last three years of the present government and ‘power for all’ is one of the most ambitious programs, which addresses the cause of both welfare and inclusiveness. The program stands as a joint effort of both union and state governments to provide uninterrupted power supply to every household by 2019.

Undoubtedly, the ‘power for all’ program appears to be a big task. There are millions of households in our country who do not have access to electricity in their houses. In fact, as per the last household consumption expenditure survey conducted by national sample survey organization (nsso) in 2011-12, twenty percent of households (roughly 50 million) are reported not to have consumed electricity at all. Over the last five years since the last survey conducted, if we assume an improvement of five percentage point in the proportion of households consuming electricity that still leaves fifteen percent of total households of the country without electricity supply. In order to bring these households into network of electricity consumption by 2019, there is need to have a strategic move by the Union and State Governments.

First, rural areas need more attention, effort and resources as the situation is worse there compared to the urban areas. Ninety five prevent of total un-electrified households in the country belong to rural sector according to the survey. It would be difficult to accept the fact that in the modern age, more than fifty five million households in the rural sector uses kerosene to light their houses. Getting electricity connection is still perceived to be a sign of affluence. The Deen Dayal Upadhya Gram Jyoti Yojana (DDUGJY) launched by the Union Government has a significant impact on increasing rural electrification as the scheme envisages provision of free electricity connection to the rural people from below poverty line. However, the state transmission and distribution utilities with the help of state governments need to be pro-active in solving the problems such as grid extension, high cost transmission, lower recovery rate etc. which stand as barriers on the way complete rural electrification.

Second, some states need to be more pro-active and aggressive in the direction of achieving the target of power for all. It has been substantiated from the survey that distribution of un-electrified houses is uneven across states. Thirty six percent of total un-electrified houses in the country are reported from Uttar Pradesh followed by twenty seven percent in Bihar. Among others, West Bengal, Assam, Odisha etc. too have a disproportionate share in total number of un-electrified households. The issue of electrification in these states needs a big push from the Union and the concerned state governments in order to achieve the goal. The following diagram portrays deficits in electricity connectivity across the lagging states.

Figure: Percent (%) of households having no electricity connection

Source: Estimated from NSS household consumption expenditure survey, 2011-12

Two major states, Uttar Pradesh and Bihar assume the centre of debate so far as lack of adequate electricity supply is concerned. Sixty four percent of total households in Bihar and forty four percent in Uttar Pradesh are reported not to have electricity connection. However, both the states have shown determination and have signed memorandum of understanding (MOU) with the Union Government, though Uttar Pradesh signed little late i.e in Apri, 2017, just after the new government in the state took over to implement the program ‘power for all’. It is quite assuring to note that till today all the states and union territories have signed MOUs with the Union Government in the same cause.

Third, a pro-poor tariff structure may help to sustain electricity supply to the households living below poverty line. Getting grid connectivity to the villages and providing free power connection to the families may not be adequate until the issue of affordable power supply is not properly addressed. It is found that forty percent of households not connected with electricity in India are rural poor, whose average monthly per-capita expenditure is less than Rs.816. Different state governments have their own cross-subsidy policies to address the issue of access to power supply for the rural poor. In Uttar Pradesh, a family in rural areas consuming up to 50 units of electricity a month has to pay Rs.200 while in Bihar it costs Rs.350. It should be noted that 37 percent of rural population in Uttar Pradesh and 41 percent in Bihar live below poverty line. A rural poor household in these two states would be forced to spend closer to 40 percent of its monthly per capita consumption expenditure only to light the house. These two states along with the others need to rationalize the tariff structure in order to sustain the power supply to the poor households.

The distribution utilities in the states used to show differential response in supplying power to the rural sector, as tariff collection efficiency in the sector is relatively low. This inefficiency is found to be a demotivating factor for the distribution utilities to step up rural electrification. In order to achieve the success of ‘power for all’ the state governments need to direct the distribution utilities to be more active in the rural sector. A rational and pro-poor approach of the state governments along with the transmission and distribution utilities could help power to reach every household even before the specified time limit set by the Union Government.

Dr. Sridhar Kundu

Dr. Sridhar Kundu

Senior Research Officer
Centre for Budget and Governance Accountability
Dr. Sridhar Kundu

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