RURAL ELECTRIFICATION

BY DIKSHA
IIIrd SEMESTER
CHANAKYA NATIONAL LAW UNIVERSITY
INTRODUCTION
As we know that India is chiefly a rural country with 70% of its population living in rural area.
Therefore, Indias development both in social and economical basis depends on the growth of
the rural sector. In order to contribute to the development to the countrys development the rural
area should be developed and must have modern Rural electrification is the process of bringing
electrical power to rural and remote areas.

Electricity is used not only for lighting and

household purposes, but also for many farming activities, such as threshing, milking, and
hoisting grain for storage. It fills the gulf created by the shortage of labor supply by greater
productivity at lower cost. United States famous program the United States Deals Rural
Electrification was the pioneer in many programs by different countries. It is estimated that
84.6 percent1 of the 1.2 billion people in the world in 2012 were living without access to
electricity reside in rural areas. As many as 580,934 of 597,464 villages (97.2%) India were
electrified as on September 30, 2015, which effectively means that 16,530 do not have
electricity, according to a recent report by Central Electricity Authority (CEA). 2
In today's context, rural electrification has five major facets3
1. Setting up of rural electricity infrastructure
1 http://data.worldbank.org/indicator/EG.ELC.ACCS.ZS.
2http://factchecker.in/modis-power-statement-electrification-is-not-electricity/
3 http://www.teriin.org/index.php?option=com_featurearticle&task=details&sid=919&Itemid=157
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2. Providing connectivity to households

3. Adequate supply of desired quality of power
4. Supply of electricity at affordable rates
5. Providing clean, environmentally benign and sustainable power in efficient way
Since india is an agricultural country ,therefore its economy is rural economy and since 67 years
different governments in power has tried to improve the rural infrastructure and including
electric infrastructure.
Though 97.2% of villages are electrified , however not all electrified villages are getting quality
power and it is estimated that nearly 33% 4of the population may be facing under-electrification,
accessing less than 50kWh of electricity per month/household.
The definition of electrified village has changed over the years. Before October 1997, a village
was classified as electrified if electricity was used within its revenue area for any purpose
whatsoever.
After October 1997, a village was declared electrified if the electricity was used in the
inhabited locality, within the revenue boundary of the village for any purpose whatsoever.
The Ministry of Power defines a village (from 2004-05) as electrified if:
1.

Basic power infrastructure, such as a transformer and distribution lines, is provided in

the inhabited locality, as well as associated Dalit bastis (Dalit settlements, which are
often excluded from village facilities), where they exist.

2. Electricity is provided to public places, such as schools, panchayat (village council)

offices, health centers, dispensaries, community centers etc.
3. The number of households electrified should be at least 10% of the total number of
households in the village.
4 Ibid
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GOVERNMENTS INITIATIVE
The need for rural electrification was recognised in 1950s, the first major initiative was the
establishment of Rural Electric Corporation in 1969. Its main objective is to finance and promote
rural electrification all over the country. Apart from providing loan assistance to SEBs/ state
power utilities, equipment manufacturers and so on it is also managing the rural electrification
programmes of the Ministry of Power (MoP).
The enactment of Electricity Act 2003 heralded a new era for the power sector development in
India.5 The Act brought together laws on generation, transmission, distribution, trading and use
of electricity, liberalising generation, transmission and distribution and providing for penal action
for theft of power or default on payment for power consumed. It also facilitated further reform
measures to strengthen the sector. Significant GoI / regulatory initiatives in recent times have
been those pertaining to Mega / Ultra Mega Power Generation projects revised tariff regulations
for existing central government projects, competitive bidding for all future power generation
projects, tariff norms for renewable energy / introduction of Renewable Energy Certificates, new
transmission pricing grid code, power market regulations, Re structured Accelerated Power
Development Reform Programme (RAPDRP), National Electricity Fund, etc.

The programmes launched by government of India for rural electrification includes1. Rural electrification under Minimum Needs Programme launched in 1974
2. Kutir Jyoti Yojana to provide single point light to below poverty level (BPL) families in
rural India launched in 1988.
3. Pradhan Mantri Gramodaya Yojana to electrify un-electrified villages as per prevailing
definition of electrification launched in 2003

5 http://planningcommission.gov.in/reports/genrep/rep_arpower1305.pdf
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4. Remote Village Electrification Programme launched in 2001 by Ministry of New and

Renewable Energy (MNRE). This programme focused on electrifying remote villages not
connected to grid through use of renewable energy sources
5. Accelerated Rural Electrification Programme in 2003
6. Accelerated electrification of one lakh villages and one crore households launched in
2004
7. Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY): Launched in 2005, this
programme aimed at providing energy access to all by 2009 and at least one unit of
electricity per household per day by 2012 as envisaged in NEP (National Electricity
policy) 2005. All earlier programmes were merged in RGGVY
8. In 2009, MoP launched Decentralised Distributed Generation Scheme under RGGVY to
electrify un-electrified villages through mini grids. This also included villages which
receive less than six hours of electricity per day
9. In December 2014, current government announced Deendayal Upadhyay Gram Jyoti
Yojana (DDUGJY) with major modifications in RGGVY.
10. Chndra Bhushan ,2014
POLICIESNational Electricity Policy 2005
In compliance with section 3 of the Electricity Act 2003 the Central Government notified the
National Electricity Policy.
The National Electricity Policy aims at laying guidelines for accelerated development of the
power sector, providing supply of electricity to all areas and protecting interests of consumers
and other stakeholders keeping in view availability of energy resources, technology available to
exploit these resources, economics of generation using different resources, and energy security
issues.

The National Electricity Policy was evolved in consultation with and taking into account views
of the State Governments, Central Electricity Authority (CEA), Central Electricity Regulatory
Commission (CERC) and other stakeholders.
The aims and objectives of the policy are as follows

Access to Electricity - Available for all households in next five years

Availability of Power - Demand to be fully met by 2012. Energy and peaking shortages to
be overcome and adequate spinning reserve to be available.

Supply of Reliable and Quality Power of specified standards in an efficient manner and at
reasonable rates. Per capita availability of electricity to be increased to over 1000 units by
2012.

Minimum lifeline consumption of 1 unit/household/day as a merit good by year 2012.

Financial Turnaround and Commercial Viability of Electricity Sector.

Protection of consumers interests.

National Rural Electrification Policy, 2006

The National Rural Electrification Policy was notified in compliance with Sections 4 & 5 of the
Electricity Act, 2003 by the Central Government.
Relevant extracts of the National Rural Electrification Policy, 2006

Goals include provision of access to electricity to all households by the year 2009, quality
and reliable power supply at reasonable rates, and minimum lifeline consumption of 1
unit/household/day as a merit good by year 2012.

For villages/habitations where grid connectivity would not be feasible or not cost
effective, off-grid solutions based on stand-alone systems may be taken up for supply of
electricity. Where these also are not feasible and if only alternative is to use isolated

lighting technologies like solar photovoltaic, these may be adopted. However, such
remote villages may not be designated as electrified.

State government should, within 6 months, prepare and notify a rural electrification plan
which should map and detail the electrification delivery mechanism. The plan may be
linked to and integrated with district development plans. The plan should also be
intimated to the appropriate commission.

Gram panchayat shall issue the first certificate at the time of the village becoming eligible
for declaration as electrified. Subsequently, the Gram Panchayat shall certify and confirm
the electrified status of the village as on 31st March each year.

The state government should set up a committee at the district level within 3 months,
under the chairmanship of chairperson of the Zilla Panchayat and with representations
from district level agencies, consumer associations, and important stakeholders with
adequate representation of women.

The district committee would coordinate and review the extension of electrification in the
district and consumer satisfaction, etc.

Panchayat Raj institutions would have a supervisory / advisory role.

Institutional arrangements for backup services and technical support to systems based on
non-conventional sources of energy will have to be created by the state government.

SCHEMES
Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY)
This scheme focuses on feeder separation (rural households & agricultural) and strengthening of
sub-transmission & distribution infrastructure including metering at all levels in rural areas. This
will help in providing round the clock power to rural households and adequate power to
agricultural consumers. The earlier scheme for rural electrification viz. Rajiv Gandhi Grameen

Vidyutikaran Yojana (RGGVY) has been subsumed in the new scheme as its rural electrification
component.6
Rajiv Gandhi Grameen Vidyutikaran Yojana(RGGVY)
Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) was launched in April 2005 by merging
all ongoing schemes. The Government is implementing Decentralised Distributed Generation
(DDG) under Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) for electrification of
villages where grid connectivity is either not feasible or not cost effective. In XII Plan period,
DDG has also been extended to the grid connected area where supply of electricity is less than 6
hours a day. Decentralized Distributed Generation (DDG) can be from conventional or
renewable sources such as Biomass, Biofuels, Biogas, Mini hydro, Solar etc. Rs.900 crore as
subsidy has been earmarked for DDG projects.
Under the programme, 90% grant is provided by Govt. of India and 10% as loan by Rural
Electrification Corporation (REC) to the State Governments. Rural Electrification Corporation
(REC) is the nodal agency for the programme.
At present, Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) has been subsumed in the
Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) as its rural electrification component.
Progress made under RGGVY
As many as 96% of un-electrified villages have been electrified across the country as on May
2014 and intensive electrification of 80% villages has been completed while free electricity
connections have been provided to 77% BPL households under the flagship programme,
RGGVY of Government of India.7
Remote Village Electrification Programme
The Ministry of New and Renewable Energy, Government of India is implementing this
programme for providing financial support for electrification of those remote unelectrified
census villages and unelectrified hamlets of electrified census villages where grid-extension is
either not feasible or not cost effective and are not covered under Rajiv Gandhi Grameen
6 http://www.ddugjy.gov.in/mis/portal/index.jsp
7 https://data.gov.in/keywords/rajiv-gandhi-grameen-vidyutikaran-yojana
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Vidyutikaran Yojana. Such villages are provided basic facilities for electricity / lighting through
various renewable energy sources. Small Hydro Power Generation systems, biomass gasification
based electricity generation systems, solar photovoltaic power plants, etc., in distributed power
generation mode may be used depending upon the availability of resources for generation of
required electricity.8
Village Energy Security Security programme
The objective of the project is to go beyond electrification by addressing the total energy
requirements for cooking, electricity, and motive provide access to electricity through
renewables to households in remote villages and hamlets, which are not likely to get covered
through grid extension.
The projects on village energy security are taken up with a view to demonstrate the techoeconomic parameters of the village energy security plan, provide operational experience,
mobilize local communities and firm up the institutional arrangements.

IMPACTS AND EXPECTED OUTCOMES

Rural areas of poor countries are often at a disadvantage in terms of access to electricity. The
high cost of providing this service in low populated, remote places with difficult terrain and low
consumption result in rural electricity schemes that are usually more costly to implement than
urban schemes. In addition, low rural incomes can lead to problems of affordability, and the long
distances mean greater electricity losses and more expensive customer support and equipment
maintenance. Despite this, rural electrification has been claimed to have substantial benefits,
promoting production and better health and education for households.
Another issue of concern is indoor air pollution. Approximately 2.8 billion people worldwide
rely on solid fuels for cooking, lighting, and heating. These fuels are usually burned inefficiently,
both as bio fuels for cooking and kerosene lighting, which results in substantial emissions of air
pollutants that affect human mortality and morbidity rates. As the main source of indoor air
pollution, cooking with biomass has received the most attention in the literature, and significant
8 http://www.mnre.gov.in/
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efforts have been made to improve cooking practices. Kerosene has received less attention,
despite being used to light approximately 300 million households worldwide. Kerosene
emissions include fine particular matter (particles with aerodynamic diameter 2.5m; PM 2.5),
carbon monoxide (CO), nitric oxides (NOX),and sulfur dioxide (SO2) (1416). Kerosene
burning devices can impair lung function and increase cancer risks as well as incidence of
infectious illness and asthma . There is extensive evidence that indoor air pollution is strongly
linked to human health, especially among children, and that the presence of pollutants related to
kerosene in the environment is also related to human health. In addition, kerosene lamps have
important environmental consequences. It is estimated that these devices are responsible for 7
percent of annual global black carbon emissions.9
The benefits of rural electrification are theorized to be span a wide range, from increases in
income due to new work opportunities to increased security.

Income benefits from access to electricity through new opportunities of work, especially

in nonfarm activities.
Leisure and domestic benefits from lighting and TV/radio.
Time savings from household chores which can be used for leisure and Productive

activities.
Education benefits through higher earnings for children living in electrified households

that have higher educational attainment.

Increased productivity of home business through higher revenues of existing businesses

and the creation of new home business.

Increased agricultural productivity through higher revenues.
Improved health outcomes and reduced mortality through improved Indoor air quality

from changes in lighting source.

Reduced fertility at lower costs, achieved through information channels that use

electricity in lieu of reproductive health programs.

Public goods benefits, such as increased security and

lower environmental

contamination.

9http://www.afd.fr/webdav/shared/PRESSE/Evenements/RENCONTRES%20DU
%20DEVELOPPEMENT/The%20Impact%20of%20Rural%20Electrification-Maximo
%20Torero%20Final.pdf
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USE OF RENEWABLE RESOURCES IN RURAL ELECTRIFICATION:

To be able to provide adequate electricity to its population, India needs to double its
current installed capacity to over 300 GW by 2017. Also, Indias demand for oil in
2015 is expected to be 41% higher than in 2007 and almost 150% higher in 2030
needed primarily to feed a growing transportation sector. Renewable energy is well
positioned to play a critical role in addressing this growing energy demand.
Rural electrification projects using renewables such as solar PV, biomass, small hydro
power must be propounded. Evolution of renewable energy technologies and products
have now opened new frontiers for renewable energy based rural electrification using
pico solar lighting products, DC and Ac mini-grids, smart micro grids, and eventually
grid interactive micro and mini-grids which can complement the grid extension
program. Renewable energy' based decentralised systems offer unique advantages
which include:

Faster implementation which can create local employment and boost local
economy by providing access to electricity in reliable way

Utilisation of locally available resources bringing in energy security and energy

independence

Pollution free and sustainable development.

The Government of India has enacted several policies to support the expansion of
renewable energy. These include:

Electricity Act 2003: Mandates that each State Electricity Regulatory

Commission (SERC) establish minimum renewable power purchases; allows for
the Central Electricity Regulatory Commission (CERC) to set a preferential

tariff for electricity generated from renewable energy technologies.

National Electricity Policy 2005: Allows SERCs to establish preferential tariffs
for electricity generated from renewable sources.

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National Tariff Policy 2006: Mandates that each SERC specify a renewable
purchase obligation (RPO) with distribution companies in a time-bound manner

with purchases to be made through a competitive bidding process.

Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) 2005: Supports
extension of electricity to all rural and below poverty line households through a
90% subsidy of capital equipment costs for renewable and non-renewable

energy systems.
Eleventh Plan 20072012: Establishes a target that 10% of power generating
capacity shall be from renewable sources by 2012 (a goal that has already been
reached)10

At the end of 10th five year plan of the government of India renewable energy sources
succeeded to meet only 1% of rural energy need; therefore, in the subsequent plan i.e.
11th five year plan, there are two programs introduced based on renewable energy.
Namely, Remote Village Renewable Energy Program (RVREP) and Grid-connected
Village Renewable Energy Program (GVREP).

CHALLENGES
Some of the challenges faced during rural electrification are listed below:
High cost of grid extension
Supply rationating due to non availability of power
High operation and maintenances cost
Incomplete coverage
Faulty definition/Incomplete Data
Low demand, low consumption and shift in focus
Long and cumbersome procedures
Financially unviable.
Active Participation by Local Bodies
Lack of measures for capacity enhancement
Overemphasis on grid rural electrification.

10 http://www.ijer.in/ijer/publication/v3s6/IJER_2014_604.pdf (accessed on 28th

October 2016 at 14:22).
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CONCLUSION
The estimation results indicate that electrification has significant positive effects on time
allocation for fuel collection, as well as income, expenditure, and poverty incidence. It also has
a positive impact on childrens schooling, which can increase future income; thus, electricity
not only alleviates poverty in the near term but also holds the potential to do so over
the longer run.

The policy implication of these findings is that rural electrification

should be used as a complement to other educational investments to further improve schooling

and educational attainment.
Despite such significant benefits of electrification, the household access rate in rural India is
substantially lower (about 60 percent) than that for village electrification (about 90
percent).

Possible reasons for households not adopting electricity are high connection

costs and lack of service reliability.

Rural households in India depend mainly on

agriculture-based seasonal income, from which saving enough for the connection cost may be
difficult. Therefore, it may be advisable to spread the connection cost over a longer period. We
have observed that the kerosene consumed by households with electricity is not much
less than for households without electricity. At the very least, the money households with
electricity spend on kerosene equals what they pay for unreliable electricity service, not
accounting for the loss of productivity and appliance damage due to power outages, suggesting
that access without reliability may be counter-productive. Policy makers must focus on this key
issue.
Quintile regression estimates show that electrification benefits are, not unexpectedly,
higher for wealthier households. The greater benefits to richer households accrue through
higher consumption and more diversification of electricity service.

This too is an issue

that policy makers keen on the poverty-alleviation aspects of electrification should address.
SUGGESTIONS:
1. Promote Rural electrification through renewable
2. For faster, reliable and effective rural electrification a unified model for
implementation is necessary. An integrated policy framework would help in this
regards.
3. Set up effective institutions to deal with problems.
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4. Use of Solar street lights for village electrification and providing light at
community places.
5. Use of Solar lanterns / home lighting systems
6. Use of new versions with LED lights and additional facilities like cell phone
charging or powering fans, TV
7. Establishing Solar charging stations
8. Establishing Lantern charging stations which work on tee tor service principle,
managed by local entrepreneur
9. Introduction of Mini grids as Mini grids with variety of sizes based on solar,
wind, small hydro or biomass power are promising candidates for sustainable
business model for rural electrification
10. Reliable 24 x 7 power in rural areas is needed
11. Technology development for balancing supply and demand in remote areas is
essential.
12. Charging the right price for electricity.
13. Lowering the barriers to obtaining a supply
14. Reducing Transmission and Distribution (T&D) losses

Rural electrification is complex and challenging task however, an integrated approach

of combining renewable with conventional grid extension approach and proactive
policies is one of the preferred ways to move ahead.

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