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Business News/ Opinion / The welfare effects of rural electrification

The welfare effects of rural electrification

Rural electrification will not only help improve education, health and connectivity but will also enable India meet its climate change commitments

The cost of power supply to rural areas is also significantly high. Photo: Pradeep Gaur/MintPremium
The cost of power supply to rural areas is also significantly high. Photo: Pradeep Gaur/Mint

Access to affordable electricity for each and every household is a necessary condition for social and economic development. However, rural electrification received attention in the development agenda mostly in the last one-and-a-half decades. In 2005, the Central government launched the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) which subsumed all other ongoing schemes related to rural electrification. The scheme focused on electrification of villages through implementation of decentralized distributed generation (DDG). RGGVY was later included in the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) (recently renamed the Saubhagya scheme), which additionally focuses on feeder separation, improvement of sub-transmission and distribution network, and metering to reduce losses.

All these schemes have delivered results and now only a few villages are left that have yet to achieve the target of 100% electrification. As per the latest government statistics, only 910 villages are yet to be electrified, which account for 5% of India’s un-electrified villages (as on April 2015), excluding some uninhabited villages. However, the performance of rural household electrification is not that encouraging. Around 35 million households—approximately 11% of the total rural households—are yet to be electrified.

The success of rural electrification should not be measured only on the basis of connections provided, but also on the basis of provision of reliable and quality power supply during peak hours. Both of these are still persistent problems faced by a majority of India’s rural households. As per the United Nations Development Programme (UNDP) recommended “Energy Plus" approach, supply of electricity only for lighting is a necessary but not sufficient condition for rural livelihood development. This framework emphasizes on energy access in combination with productive use of electricity for income generation and livelihood upliftment.

However, to use electricity directly for income-generation activities, ownership of appliances plays an important role, apart from market availability, financial and technical assistance. Appliance ownership, in turn, depends on the household’s economic status and on the quality and availability of power supply. This makes the problem more challenging. Further, lack of access to energy at home and for income-generating activities is associated with higher levels of poverty, low productivity, heavy workload, women’s safety issues, missed educational opportunities and high exposure to health risks.

The cost of power supply to rural areas is also significantly high. As a majority of the rural households cannot afford high cost supply, utilities are reluctant to supply the required quality and quantity of electricity in these areas. This is apart from the issue of capacity constraint in terms of power generation/purchase. However, implementing some appropriate measures such as smart meters, infrastructure development, franchisee arrangements with local self-help-groups (for more effective billing, monitoring and collection) may improve the situation to some extent.

The recent Saubhagya scheme addresses some of these issues. It aims to improve environment, public health, education and connectivity with the help of last-mile power connections across India along with providing electricity connections to over 40 million families in rural and urban areas by December. Households out of reach of the national electricity grid are proposed to be provided with solar power packs along with battery banks with the Rural Electrification Corporation as the nodal agency.

The Saubhagya scheme will help India, the world’s third-largest energy consumer after the US and China, meet its global climate change commitments as electricity will substitute kerosene for lighting. It will also help improve education, health, and connectivity apart from having a multiplier effect on increased economic activities and job creation.

P.C. Maithani and D. Gupta, in their book Achieving Universal Energy Access In India: Challenges And The Way Forward, have argued that despite having 16% of the global population, India’s share in global energy use is only 4.2% and in global electricity consumption, 3.5%.

Energy poverty affects women and girls more as they have to bear the primary responsibility for collecting firewood, cooking and other domestic work. These tasks expose them to negative health impacts and increase their domestic and reproductive burdens. Thus, there is also a need to explore the role of rural electrification in promoting gender equality, which, along with women empowerment, is an integral part of inclusive development and sustainable development goals (SDGs).

Presently, development programmes enhance gender equality by promoting female education and health, access to finance and skill development, providing incentive for female entrepreneurship, etc. However, none of the energy access programmes in India have incorporated gender equality in what they hope to achieve. As India is currently focusing on the achievement of SDGs, women-centric energy access programmes will contribute more effectively in achievement of various SDGs such as Goal 1 (no poverty), Goal 3 (good health and well-being), Goal 5 (gender equality) and Goal 7 (affordable and clean energy).

Saswata Chaudhury and Bhawna Tyagi are, respectively, a fellow, and a former research associate at The Energy and Resource Institute (Teri).

Comments are welcome at

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Published: 19 Apr 2018, 02:24 AM IST
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