Rural Electrification – Looking Beyond Household Electrification

A Look at Milestones in Rural Electrification 

Access to energy is a vital input in the socio-economic development of nations. Food shortages marked the decades after independence due to inadequate agriculture production, which largely depended on successful monsoons. To increase the area under irrigation, which had been the focus in the first two Five Year Plans, the Government of India (GoI) established the Rural Electrification Corporation (REC) in 1969, whose primary purpose was to support grid-connected irrigation pump sets. Then in 1974, the Minimum Needs Programme (MNP) was launched to enhance access to electricity services in rural areas. All subsequent programmes focused on universalizing access to electricity. For instance, the Kutir Jyoti Programme launched in 1988-89 aimed at improving the quality of life of the poorest households by providing single-point connections. 

Until1997, the definition of an electrified village was ‘a village where electricity is being used within its revenue area for any purpose whatsoever.’ The electrified village was later defined as ‘a village where electricity is used in the inhabited locality, within the revenue boundary of the village for any purpose whatsoever.’ This definition was in practice until the year 2004. In 2000-01, GoI launched the Pradhan Mantri Gramodaya Yojana and added a rural electrification component the following year. The period 2003-04 witnessed the launch of the Accelerated Rural Electrification Programme. The next year, this programme was merged with the Kutir Jyoti Programme to form Accelerated Electrification of one lakh villages and one crore households. This brought into focus the importance of household electrification within the ambit of village electrification. To deepen village electrification, GoI in 2004 expanded the definition of an electrified village to be a village where:

  • Basic infrastructure such as distribution transformers and distribution lines are provided in the inhabited locality. 
  • Electricity is provided to public places like schools, Panchayat office, health centres, community centres, etc
  • The number of households electrified should be at least 10% of the total number of households in the village. 

Consequently, in 2005 all the then ongoing schemes/programmes on rural electrification were merged into Rajiv Gandhi Grameen Vidyuti Karan Yojana (RGGVY). The focus of RGGVY was to create a backbone of rural electricity supply; however, it came at the risk of being extensive (number of villages electrified) rather than intensive (% of households covered)[1]. Interestingly, RGGVY had a component on Decentralized Distributed Generation (DDG) for remote villages where grid connectivity was either not feasible or not cost-effective. This was the first time that the Ministry of Power, which has always been anchoring rural electrification programmes, and MNRE jointly assumed responsibility of providing electricity to remote hamlets/villages through renewable energy technologies. MNRE had also been running Remote Village Electrification Progamme (RVEP) and Village Energy Security Programme (VESP) through the State Nodal Agencies (SNAs). 

In 2014, GoI launched the Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY). The new scheme, in addition to the rural electrification component of RGGVY, had additional components on the separation of agriculture and non-agriculture feeder separation and further strengthening/augmentation of transmission and distribution infrastructure in rural areas, thereby subsuming RGGVY.[2]Additionally, GoI in September 2017 launched the Pradhan Mantri Sahaj Bijli Har Ghar Yojana or Saubhagya, targeting 100% household electrification of all interested households, estimated at three crores[3]. This target was achieved in April 2019. 

Currently, the grid is omnipresent, its benefits being harnessed across habitations. However, the supply of electricity to households is not 100%, and frequent power cuts/load shedding is a common phenomenon in most parts of the country. Furthermore, the quality of power delivered remains an issue, especially at the tail ends where there are voltage fluctuations and drops. This scenario and the current Electricity Act, present a unique opportunity for a range of stakeholders to generate power and feed into the grid. New and innovative business models can emerge, which could have large scale and long term impacts on the structure of the power sector in the country.

Looking beyond household electrification

While villages are considered the unit to be served, the electrification efforts by the government have focused on the households, possibly rightly so. The unit of analysis for both grid and off-grid electrification programmes has been villages, specifically households organized in the form of hamlets. That is, the overall village area, including the cultivatable area, is not taken into account, only the households. The DISCOMs also take this view in extending the grid to the households. However, household electrification is just one aspect of improving rural energy access and hence socio-economic development. India resides in the villages, with more than 60% population in villages, having agriculture as their primary source of livelihoods. 

The State’s future strategy should focus on the provision of power in the required quantity and quality for socio-economic development. In developing such a strategy, the following aspects should be kept in mind.

Sustainable Development Goals 

Following the Millennium Development Goals (MDGs), UNDP developed Sustainable Development Goals in 2016, focusing on poverty alleviation, democratic governance and peacebuilding, climate change and disaster risk, and economic inequality. Although MDGs did not explicitly mention access to clean and sustainable energy access to clean, it was understood that energy cuts across all themes and hence is a cross-cutting input in meeting the MDGs. To renew the focus on access to clean and sustainable energy, the SDGs have a specific goal for the same. 

SDG 7 – Affordable and clean energy: Ensure access to affordable, reliable, sustainable, and modern energy for all.

Although there is now a separate SDG, energy remains a crucial input in attaining a majority of the SDGs. For example, if populations remain energy-poor, then the attainment of SDG 1 is not possible as energy is a critical input in livelihood enhancement and strengthening. Similar linkages can be easily established between SDG 7 and the other SDGs.

Decentralised Renewable Energy and Distributed Energy Resources

The power sector in the country is centralised in its structure with the generation of tens or hundreds of MW happening at centralized locations and high voltage power sent across towards load centres through transmission networks. The DISCOMs/SEBs take this, stepped down, and supply to consumers. This system has its challenges like locating generating stations closer to fuel sources, transporting fuels from source to generating stations, creating the transmission network, etc. It also has large scale environmental impacts on land, air, and water. A massive structure like this is a crucial feature for fossil fuel-based power generation.

Renewable energy resources may not require centralisation as due to their ubiquitous nature, unlike fossil fuels, which may exist erratically across the geographical location. Till date, the term ‘decentralized renewable energy’ (DRE) has been used to refer to off-grid systems, i.e., systems disconnected from the grid. However, we should keep in mind that decentralization is the elimination of single central nodes of control and enabling controls across multiple nodes. Off-grid systems are often decentralized, but not all decentralized systems are off-grid – small scale grid-interactive systems like solar rooftop plants are an example. On the other hand, Distributed Energy Resources systems are interconnected at the distribution network[4]

Learnings from the mini-grid sector

Urban power supply scenario improved in urban areas since the 1990s, and several private players have come up to meet household electricity needs, especially in the evenings, through renewable energy-based microgrids in rural areas[5]. Mini-grids are a result of the bad quality and unavailability of grid supply along with the decrease in the costs of technology used for Renewable Energy. Additionally, it has become easier to understand Renewable Energy technologies and their implementation. A strong network of support from donors and acknowledgement of the State on the difficulty (financial and technical) of extending the grid to remote locations and non-remunerative loads also contributed to the utilisation of mini-grids.[6]The poor economic condition of the erstwhile SEBs and later the DISCOMs coupled with increased levels of disposable income in better off villages, and the aspirational needs of the rural population also contributed to the emergence of this sector.

Thus, to deepen energy access targeted at the socio-economic development of rural communities, in particular, the Government needs to develop a new rural electrification policy aimed at meeting the SDGs, especially SDG 7. Learnings from experiences of mini-grid actors in meeting productive loads and leveraging DRE-DER should be essential components of such a policy. 


[1]Modi, Vijay, 2005. Improving Electricity Services in Rural India, CGSD Working Paper No.30, pp. 30

[2]‘Deen Dayal Upadhyaya Gram Jyoti Yojana – Creating Efficiency in Electricity Distribution’, Swaniti Initiative, http://www.swaniti.com/wp-content/uploads/2017/07/DDUGJY-Brief_Schemes-Compendium.pdf

[3]FAQs on Pradhan Mantri Sahaj Bijli Har Ghar Yojana “Saubhagya”, Ministry of Power PIB Government of India, http://pib.nic.in/newsite/mbErel.aspx?relid=171148

[4]De Martini, Paul & Lorenzo Kristov, 2015, Distribution Systems in a High Distributed Energy Resources Future:

Planning, Market Design, Operation and Oversight, Lawrence Berkeley National Laboratory

[5]Bhattacharyya, S.C., 2012a. Energy Access programmes and sustainable development: a critical review and analysis, Energy for Sustainable Development, Energy for sustainable development, Volume 163, pp. 260-271

[6]Tongia, Rahul. 2018. Microgrids in India: Myths, Misunderstandings, and the Need for Proper Accounting, Brookings India, pp 5

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