Melwin Joy
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Melwin Joy

All stories by: Melwin Joy
Electrifying the Rural India

Electricity is critical to fuel the economic growth of the country. It is a fact that even after seventy years of independence, India is still racing to connect thousands of villages through electricity. At the time of Independence only 1,500 villages were electrified. Between the years 2005-12, 104,496 villages were electrified and connections were provided to 21.5 million households. Of these, 19 million households were provided free connections. Still, many villages were left out to survive in darkness.

While many of the giant IT companies and airports have their own generating systems, small business and residents in rural and urban area are still suffering due to lack of electricity. For 240 million people who spent lives in darkness, electricity still remains unaffordable, inadequate or non-existent.

India, the third largest emitter of greenhouses gases after China and the United States, has taken steps to address climate change- pledging a steep increase in renewable energy by 2030. To put an end to this problem, the Indian government has decided to come up with an ambitious project to supply 24- hour power to its towns and villages by 2022.

Lack of electricity

There are many roadblocks in unleashing the full potential of India’s power sector. One is fuel availability concerns faced by the industry. India has been dependent to a large extent on energy imports to meet its national energy requirements. As per the estimates of Planning Commission, Government of India, to ensure a sustained 8% growth of the economy, by 2031-32 India needs to increase its primary energy supply by three to four times and its electricity generation by five to six times of the 2003-04 levels. To limit the dependency on energy imports and contribute in meeting this energy challenge, the government is also laying a lot of emphasis on energy efficiency and demand side management.

Efforts are being made to increase supply from renewable sources of energy and promote energy conservation in various consumption sector through appropriate policy interventions. Energy-efficiency is extremely important and can be promoted by setting appropriate prices and this is particularly important where energy prices are rising. However, appropriate prices by themselves may not suffice and non-price incentives/disincentives are therefore also required. This includes standards of energy efficiency that are forward looking, i.e., anticipate future price changes or pollution penalties. These standards should be determined on the basis of rational considerations and must be set in an expanding range of applications, with continuous dynamic adjustment of these standards.

The standards should also be effectively enforced. There is scope to use both, mandatory and voluntary standards, the latter being reinforced by public opinion combined with appropriate tax incentives.

Given the importance of energy conservation, there is a need to focus on technological options for improving energy efficiency in the industry, power generation and commercial buildings, and promoting renewable energy technologies in different end-use sectors.

Saubhagya Scheme: Power for All

The Pradhan Mantri Sahaj Bijli Har Ghar Yojana or the ‘Saubhagya’ Scheme was launched by the Hon’ble Prime Minister Mr. Narendra Modi on 25th September 2017. The scheme funds the cost of last-mile connectivity to willing households to help achieve the goal of lighting every household by the end of December 2018.

Under this scheme, free electricity connections to all households (both APL and poor families) in rural areas and poor families in urban areas will be provided. The beneficiaries will be identified on the basis of socio economic conditions using SECC (Socio Economic and Caste Census) 2011 data. The others families would be charged a sum of Rs. 500 per household in ten equal instalments with the bill. Besides these, families located in remote and inaccessible areas would be provided with Solar Photovoltaic (SPV) based standalone systems with LED lights, fan, power plug etc.

What’s new

This new scheme is just a way of refurbishing the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) which was launched in April 2005, by the UPA government with an objective to “provide access to electricity to all rural households through creation of rural electricity infrastructure comprising of Rural Electricity Distribution Backbone, Village Electricity Infrastructure and Decentralised Distribution Generation and Supply System.”

The scheme was named after former Prime Minister Rajiv Gandhi and was formally known as Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY).  In December 2014, Ministry of Power launched the Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY), which subsumed the RGGVY programme.

Under this plan, all the families below poverty line (BPL families) were eligible to get a free electricity connection. There was also a capital subsidy involved for the programme and 90% of the subsidy was borne by the central government. From the second half of the 10th five-year plan to the end of the 11th five-year plan, Rs. 33,000 crore was allocated. The programme could not cover the entire projected geographical area and hence could not complete the entire spectrum of household electrification. So, the government decided to continue the scheme till the end of the 12th five-year plan. The fund allocation was Rs 39,275 crore.

So, basically, Saubhagya Scheme was introduced to compensate for the drawbacks of earlier schemes that considered a village electrified if it had basic distribution infrastructure to supply electricity to all public places (schools, hospitals, community centers etc.) and only 10% of households. The scheme lays emphasis on providing energy access to non-electrified households, whereas, its predecessors – the Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) and Integrated Power Development Scheme (IPDS)—were primarily focused only at improving infrastructure.

The need of the hour

Despite the government’s aggressive village electrification programme, the Deen Dayal Upadhyay Gram Jyoti Yojana launched in July 2015, under which 78% of 18,000 villages have been electrified, it was realized that the problem of electricity ‘access’ wasn’t resolved. 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 centers, dispensaries and community centers. With a large number of household still remaining without access to electricity, the Saubhagya scheme aims at ensuring the coverage of every household within each village.

Implementation Plan

Rural Electrification Corporation (REC) has been designated as its nodal agency for the Saubhagya scheme. To expedite and monitor the electrification process under Saubhagya, a web portal (www.saubhagya.gov.in) has been launched. The Saubhagya web portal has been designed and developed to disseminate information about the Household Electrification Status (State, District, Village wise), Household Progress as on date, State Wise Target vs Achieved, Monthly Electrification Progress, etc.

Under this scheme, DISCOMs (mention full form) will also organize camps in villages/cluster of villages to facilitate on-the-spot filling up of application forms including release of electricity connections to households. The details of consumers’ viz., Name and Aadhar number/Mobile number/Bank account/Driving License/Voter ID etc., as available would be collected by the DISCOMs. Power Department will also adopt innovative mechanism through dedicated web-portal/Mobile App for collection/consolidation of application form in electronic mode and also capturing process of release of electricity connections.

Benefits of the Scheme

All DISCOMs including Private Sector DISCOMs, State Power Departments and RE (Rural electrification) Cooperative Societies shall be eligible for financial assistance under the scheme.

The prospective beneficiary households for free electricity connections under the scheme would be identified using SECC 2011 data. However, un-electrified households not covered under SECC data would also be provided electricity connections under the scheme on payment of Rs. 500 which shall be recovered by DISCOMs in 10 installments through electricity bill.

The electricity connections to un-electrified households include provision of service line cable, energy meter including pre-paid/smart meter, single point wiring. LED lamps and associated accessories will also be installed in line with the technical specifications and construction standard.

In case of any un-electrified households located in remote and inaccessible areas, power packs of 200 to 300 Wp(with battery bank) with a maximum of 5 LED lights, 1 DC Fan, 1 DC power plug etc. may be provided along with the provision of Repair and Maintenance (R&M) for 5 years.

This scheme may also consider settlement of old dues and reconnection as per norms.

Improved quality of life especially for women

Above all, this scheme will help India, the world’s third-largest energy consumer after the US and China, to help meet its global climate change commitments as electricity will substitute kerosene for lighting purposes. Lighting in turn will also help in improving education, health, connectivity with the multiplier effect of increased economic activities and job creation.

A non-subsidy payout scheme

Saubhagya Scheme comes with a non-subsidy payout initiative. With no subsidy component for monthly electricity consumption, the Gram Panchayat and public institutions in the rural areas will be authorized to carry out billing and collection tasks which have been pain points for the DISCOMs. States will also be provided with an incentive of 50% of their loan being converted to grants, if the electrification targets are met by December 2018.

Estimated cost and budget allocation

As per the government data, there are 40.53 million households without electricity connections. Of India’s 606,172 villages, there are fewer than 200,000 villages in which all houses have electricity connections. Keeping this statistical data in mind, the Saubhagya scheme is estimated to cost Rs. 16,320 crore, of which the Union government intends to pay Rs. 12,320 crore. From this amount, Rs. 10,587.50 crore will go to electrification plan in rural India and Rs. 1,732 crore to the urban India.

In November 2014, the government put the total cost of the Deendayal Upadhyaya Gram Jyoti Yojna at Rs. 43,033 crores to achieve total rural electrification by December 2018. So far, over three years (2015-18), the government has actually allocated just under 30% of this total estimated cost of the scheme (including the full budgeted amount for this year).

This Budget has also increased allocation towards the Saubhagya scheme (household electrification) launched in September 2017 and has set aside more funds towards the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) (electrification of villages). The allocation is Rs. 6,550 crore towards Saubhagya Scheme and Rs. 3,800 crore towards DDUGJY. Power Ministry has also informed that each state will utilize the funds allotted under rural electrification programme for providing electricity to all rural households and to supplement them the Rural Electrification Corporation would provide soft loans in lieu of fund shortage.

Saubhagya initiative also includes IPDS (Integrated Power Development Scheme) which aims to provide quality and reliable 24×7 power supply in the urban area. So far, projects worth Rs. 26,910 crore covering 3,616 towns have been sanctioned. State utilities have awarded the works worth Rs. 23,448 crore. The IT and technical intervention envisaged in IPDS scheme will not only ensure 24×7 power supply in urban area but will also help in improvement in billing and collection efficiency which will ultimately result in reduction in Aggregate Technical and Commercial (AT&C or distribution) losses.

Current Status

According to the data shared by the Ministry of Power, there has been a 6.5% to 7% growth in power demand during the current fiscal compared to the last financial year. This is on the back of 35.96 lakh new households getting electricity connections under the Saubhagya scheme since October 2017. Energy generation from conventional sources also grew by 4.72 per cent to 1,160.141 billion units in the financial year 2016-17.

As per the New Delhi government data, all of India’s 597,464 census villages have been electrified. Electrified means the village is connected to power grid. The last village to be brought on the national power grid was Leisang in the Senapati district of Manipur. The rural villages have been connected to the grid via the government’s Deen Dayal Upadhyaya Gram Jyoti Yojana programme.

The National Democratic Alliance (NDA) census estimated there were 18,452 un-electrified villages. During project rollout it was found out that an additional 1,275 villages also didn’t have electricity access. As of April 2018, all villages have been electrified, either through the national grid or off grid solutions. 1,236 Villages have been declared uninhabited and 35 have been notified as grazing reserves.

Post electrification of Indian villages, the Government focusses to electrify every house under Saubhagya Scheme. The next step in the programme is provide electricity connections to more than 40 million families in rural and urban areas by March 2019 under the Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya).

A uniform supply of electricity is required to facilitate the development of rural India. Going beyond basic connectivity is essential to understanding the effects of modern energy in the developing world. Providing access to reliable electricity is vital for ending extreme poverty and boosting shared prosperity.  Thousands of lives will be lit up with the success of this huge electrification milestone. Saubhagya Scheme will not only brighten up the streets but also improve the socio-economic conditions of the people by providing them with better opportunities and improved living conditions.

Melwin Joy
AUTHOR

Melwin Joy

All stories by: Melwin Joy