Rural electrification in India

  • Rural electrification is considered to be the backbone of the rural economy.
  • The electricity generation capacity in India is the fifth largest in the world.
  • India is the sixth largest consumer of electricity and accounts for 3.4 percent of the global energy consumption.
  • India has four crore un-electrified rural households.
  • The year 2022, has been earmarked for achieving the target of “24×7 Power for All”.
  • Achieving this target would mean electrifying more than 7 lakh households every month!

According to Central Electricity Authority (CEA), as per the new definition, a village would be declared as electrified, if:

  • Basic infrastructure such as Distribution Transformer and Distribution lines are provided in the inhabited locality as well as the Dalit Basti hamlet where it exists.
  • Electricity is provided to public places like Schools, Panchayat Office, Health Centres, Dispensaries, Community centres etc.
  • The number of households electrified should be at least 10% of the total number of households in the village

Rural electrification has five major facets

  • Setting up of Rural Electricity Infrastructure
  • Providing connectivity to households
  • Adequate supply of desired quality of power
  • Supply of electricity at affordable rates
  • Providing clean, environmentally benign and sustainable power in efficient way.

Rural Electrification provides for:

  • Increase in agriculture yield.
  • Business of Small and household enterprises shall grow resulting into new avenues for employment.
  • Improvement in Health, Education, Banking (ATM) services.
  • Improvement in accessibility to radio, telephone, television, internet and mobile.
  • Betterment in social security due to availability of electricity.
  • Accessibility of electricity to schools, panchayats, hospitals and police stations.
  • Rural areas shall get increased opportunities for comprehensive development.

Energy source and Percentage Share in installed capacity

  • Thermal – 64.75%
  • Nuclear – 2.78%
  • Hydro – 21.73%
  • Other renewable energy sources – 10.73%

Related Policies

National 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 considering 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

  • 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.

National policy for renewable energy-based micro and mini grids

  • Introduced by Ministry of New and Renewable Energy
  • It targets setting up of at least 10,000 projects with a minimum capacity of 500MW by 2021
  • The draft policy proposes to extend energy services beyond lighting.

Related Schemes

Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY)

  • Launched in 2015.
  • The DDUGJY is one of the flagship programmes of the Ministry of Power.
  • The earlier scheme for rural electrification viz. Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) has been subsumed in Deen Dayal Upadhyaya Gram Jyoti Yojana.

Salient features of Deen Dayal Upadhyaya Gram Jyoti Yojana

  • To provide electrification to all villages. It will facilitate 24×7 supply of power.
  • Feeder separation to ensure sufficient power to farmers and regular supply to other consumers.
  • Improvement of Sub-transmission and distribution network to improve the quality and reliability of the supply.
  • Metering at all levels (input points, feeders and distribution transformers.
  • Micro grid and off grid distribution network Rural electrification- already sanctioned projects under RGGVY to be completed.

Rajiv Gandhi Grameen Vidyutikaran Yojana

  • 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.
  • 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.

Aims of RGGVY

  • Electrifying all villages and habitations as per new definition
  • Providing access to electricity to all rural households
  • Providing electricity Connection to Below Poverty Line (BPL) families free of charge

Infrastructure under RGGVY

  • Rural Electricity Distribution Backbone (REDB) with 33/11 KV (or 66/11 KV) sub-station of adequate capacity in blocks where these do not exist.
  • Village Electrification Infrastructure (VEI) with provision of distribution transformer of appropriate capacity in villages/habitations.
  • Decentralized Distributed Generation (DDG) Systems based on conventional non-conventional energy sources where grid supply is not feasible or cost-effective.

Progress made under RGGVY

  • Most people reported that they have benefited from electricity connections since they are now able to use bulbs, fan, TV as well as mobile phones. In UP, a significant percent of those surveyed (43%) reported to have started using mobile phones after electrification since it became possible to charge the mobile sets. In Bihar, the most important use of electricity by the beneficiary households, as perceived by them, is for illumination (94.9%), followed by security (89.9%), communication through cellular phones (42.1%), accessing information and entertainment (52.1%) and comforts by running fans (18.4%).
  • In Madhya Pradesh, 85% of the villagers, in particular, women and children feel more secure and protected against wild animals, venomous reptiles and robbers due to electrified households and street lights.
  • 75% of women surveyed in Rajasthan stated that they are able to work in the fields after electricity reached their homes.
  • Students in all states reported to have benefited a great deal as after electrification under RGGVY, they are now able to study for longer hours and also save money time which they had to spend on kerosene lamp. They also feel more comfortable during summer days due to the fans in the class. In Andhra Pradesh, 88% of beneficiaries reported positive impact on education. In UP, nearly 64% reported using electricity for education, 56% In Madhya Pradesh and 48 % In Bihar.
  • In J K, most people feel that security standard of life has increased after RGGVY implementation. Villagers are able to get the treatment in the night. In some of the villages, it was found that the villagers use electrical appliances for crop processing. Many shops were also found to be electrified in the villages through RGGVY line.

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 DDUGJY.
  • 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.

Village Energy 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 techno-economic parameters of the village energy security plan, provide operational experience, mobilize local communities and firm up the institutional arrangements.
  • Area of coverage: The projects would be undertaken in unelectrified remote villages and hamlets that are not likely to be electrified through conventional means.
  • Guidelines for implementation of the Projects: The projects would be undertaken by the Panchayats duly facilitated by implementing agencies such as DRDAs, forestry departments, NGOs, entrepreneurs, franchises, co-operatives, etc.

Preparation of proposals for the projects and identification of villages / hamlets
The village / hamlet identified should

  • Be remote and may include a tribal or forest-fringe village / hamlet.
  • Have adequate availability of fallow, common or uncultivated non-grazing land for raising plantations
  • Have a cohesive and progressive social structure
  • Have a minimum of 25 and maximum of 200 households
  • Should be identified in consultation with forest, tribal and rural development departments / agencies.

Preparation of a preliminary proposal

  • After selection of the village / hamlet, a preliminary proposal would have to be prepared, got duly endorsed by the concerned State Nodal Agency and forwarded to the Ministry for consideration of `in principle’ approval.

Pradhan Mantri Sahaj Bijli Har Ghar Yojana –“Saubhagya”

  • Launched in 2017.
  • It will provide the required financial assistance for strengthening and improvement of infrastructure in the power sector.
  • Pradhan Mantri Sahaj Bijli Har Ghar Yojana, or Saubhagya, to ensure electrification of all willing households in the country in rural as well as urban areas.

Salient features of Pradhan Mantri Sahaj Bijli Har Ghar Yojana – “Saubhagya”

  • To ensure electrification of all willing households in the country in rural as well as urban areas.
  • The beneficiaries for free electricity connections would be identified using Socio Economic and Caste Census (SECC) 2011 data.
  • The solar power packs of 200 to 300 WP with battery bank for un-electrified households located in remote and inaccessible areas, comprises of Five LED lights, One DC fan, One DC power plug. It also includes the Repair and Maintenance (RM) for 5 years.

The outcome of the Scheme is as follows:

  • Environmental upgradation by substitution of Kerosene for lighting purposes
  • Improvement education services
  • Better health services
  • Enhanced connectivity through radio, television, mobiles, etc.
  • Increased economic activities and jobs
  • Improved quality of life especially for women


  • Definition issue: Only 1 in 10 households needs to have electricity supply for the village to be officially electrified. According to 2011 census, only 55.3% of all rural households had access to electricity
  • Quality issue: Around 67% of electrified villages suffer from erratic and unreliable power supply. Low voltage was widely reported.
    • Many rural consumers were displeased with the poor power supply and cited reliability, quality, duration, and affordability as key concerns.
    • The distribution transformers catering to villages had the capacity to support the load of only 10% of the households and thus the instances of overloading and transformer breakdowns are significant.
    • Only 7%–10% rural locations receive supply during the full evening hours (5 pm to 11 pm).
    • In Bihar, Jharkhand and UP, more than one-third of electrified households received less than four hours of supply during the day and voltage fluctuations are also common.
  • Metering issue: More than 28% electrified villages reported overcharging and ad-hoc billing. One-time connection charges also differed from village to village.
  • In rural areas, evidences of supply being given without proper meters or meters not being read correctly / and bills being issued without proper meter readings are commonplace.
  • Further, there are also instances of billing delays, particularly in issuing the first bill after connection. This increases the likelihood of payment defaults leading to disconnection of supply.
  • Accountability issue: 52% villages face issues with contractors, repair persons and power distribution companies. Either no one turns up to address complaints or repairs are done after paying bribes or residents get repairs done at their own cost.
  • Inaccessibility: Geographical terrain is posing a problem to grid expansion in at least 13% of all villages.
  • NPA issue: Banks do not lend to mini-grid developers due to poor recovery of loans
  • Kerosene dependence: Despite having electricity connection.
  • Affordability issue:.Among the most energy deprived states, surveys have found that while most villages and more than two-thirds of the households had electricity connections, less than 40 per cent had meaningful access to electricity.
    • Financial Issues: High upfront cost is the major reason behind consumer disinterest in taking up and sustaining (by timely paying of bills) an electricity connection.
  • Implementation and operational roadblocks: While there is progress in giving connections, network investments for rural electrification have been slower than planned. Lack of timely network investments jeopardises the provision of reliable, affordable power supply.
    • Operational issues: In the first phase of RGGVY, rural franchisees were expected to manage distribution operations in newly electrified areas. However, most of them are not operational and DDUGJY does not envisage such franchisees.

Way forward

Access to electricity is a cornerstone to the development of and essential for better quality of life for rural India. Government need to outline a holistic approach to Rural Electrification.

  • Metering and data management using ICT: Use information technology to monitor metering at feeder and distribution transformer levels to allow proper auditing of power supply.
    • Parameters such as DT failure rate, hours of supply (especially during evening hours), metering and billing information, information on consumer disconnections, new connections for entrepreneurial use, electrification of rural institutions., could be tracked and reported on the national dashboards on a monthly basis for every district or division.
    • With usage technology to monitor hours of supply, the duration of supply and interruptions can be recorded without manual intervention and tracked at a disaggregated level. This information can be used by SERCs and consumers to make DISCOMs more accountable for power supply.
  • Expansion:
    • The first step towards the target would be to provide new connections to un-electrified households and legalising existing illegal connections.
    • Improving uptake of connections by addressing financial hurdles and awareness barriers is to be taken up.
  • Financial constraint: While BPL households already receive a free connection under the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), APL families could be given a low-cost EMI based connection.
  • Awareness: Empowering and encouraging local authorities to organise awareness campaigns and enrolment camps in habitations exhibiting limited awareness are also essential.
  • Best practice: Bihar has currently evolved a good model both awareness campaigns subsidy for APL families.
  • Supply situation: Improving the supply situation for already electrified households is to be done.
  • DISCOM reforms: DISCOMs need to better plan for their infrastructure, factoring in near-term increase in demand, strengthening maintenance, and improving supply.
    • To better manage their services, discoms could explore a franchisee model by collaborating with local mini-grid operators.
  • Innovative Business: As managing rural customers, particularly in remote areas, is a challenge innovative business models need to be explored.
    • Several ideas like prepaid metering and direct benefit transfer (DBT) are being proposed to handle the metering, billing and subsidy issues .
    • Considering the limited financial and IT literacy of rural consumers, as well as the challenges in internet reliability, it is better to try out pilots before rolling out such solutions on a large scale.
  • Maintenance and operations such as reading meters, generating bills, and collecting revenues, are key concerns.
    • the rural distribution networks require investments to tide over the operation and maintenance challenges that lead to frequent failures of DTs and line faults, requiring long repair times.
  • Distributed generation: Models like rooftop solar power could complement centralised grid electricity to ensure sustained use of electricity for the entire rural economy.
  • Accountability:
    • There is a need to hold DISCOMs accountable for monitoring of supply quality and operation and maintenance efforts in rural areas in order to ensure uninterrupted supply.
    • The financial health and operational efficiency of DISCOMs is subject to tremendous scrutiny under bailout schemes like UDAY . There needs to be similar emphasis and political discourse on supply and service quality issues to hold DISCOMs accountable for the same.
  • Tariff changes:
    • In many states, small industrial and commercial consumers pay tariff rates comparable to large industrial units and commercial complexes. There needs to be innovation in tariff design to encourage home-based or small enterprises in newly electrified villages
    • Currently, supply of one unit of power costs the DISCOMs about Rs. 7 and this cost will most likely increase at a rate of more than 4% per unit in the coming years. As such costs will be unaffordable for many consumers, and with the contribution of cross-subsidies reducing, substantial subsidy support will be necessary.
  • Research:
    • Even after the targets of connections are met, there is a need for a national institution, with rural electrification as its key focus. Its mandate need not be to operate the rural distribution businesses but to provide knowledge and financial support to DISCOMs for maintaining and strengthening the rural network and ensuring supply.
  • Success mainly depends on curbing DISCOM losses and ensuring consumer honesty. It is hoped that electrification would lead to improved consumer satisfaction, as electricity truly becomes an enabler of prosperity in rural India. Concerted efforts to monitor supply hours for rural, remote and newly electrified households are needed.

Practice questions

India’s efforts to achieve 100 % rural household electrification are yet to be realised. Analyse (250 words)