Govt set to fail on rural power promise

Govt set to fail on rural power promise

Adelayed allocation of funds has all but ensured that the current government will fail to deliver on its ambitious promise of providing electricity to every village in India by 2009.

As of March, the last period for which data was available, the project has been able to provide electricity to less than one third of the 125,000 targeted villages.

“There is no money sanctioned for the programme for 2007-08," said a senior government official associated with the programme, who did not wish to be identified because of the sensitive nature of the issue. “Even if the money is disbursed now, it will be very difficult to achieve the targeted deadline of 2009. How do you expect projects, which are yet to start, to be completed within one year? It will take four months to start new projects from the date of receiving the funds. It is impossible now."

A senior power ministry official, who did not wish to be identified, confirmed that the deadline would be missed, but insisted that “the funding of around Rs28,000 crore for the 11th Plan period (2007-2012) will be sanctioned shortly—within two days."

The ruling Congress-led United Progressive Alliance had launched its ambitious rural electrification programme, dubbed the Rajiv Gandhi Grameen Vidyutikaran Yojana, in April 2005.

It becomes the second power sector scheme, joining the Accelerated Power Development Reforms Programme (APDRP), that is behind schedule due to delays in allocation of funds. Mint reported on 24 August that APDRP, aimed at bringing down power transmission and distribution losses, a vital step in fixing India’s power woes, hadn’t been funded despite the actual plan getting under way on 1 April.

As for the rural electrification plan, for the first two years, the scheme had an initial total outlay of Rs5,000 crore. However, since April, no further funding has been allocated.

The total capital outlay for the entire scheme, spread over four years, was to be Rs16,000 crore. However, due to a shortage of contractors and equipment, the programme witnessed a severe cost escalation. “This led to the revision of capital investment from Rs16,000 crore to Rs50,000 crore," the government official said.

The scheme is part of the government’s ambitious Bharat Nirman project to develop rural infrastructure, at an initial project cost of Rs1.76 trillion.

The project was to be implemented in four years to provide rural India with irrigation, roads, water supply, housing, electrification and telecom connectivity.

The scheme, launched by Prime Minister Manmohan Singh, is being implemented through the Rural Electrification Corporation, under which the Centre underwrites 90% of the capital cost.

“The funding delay will have a detrimental and negative impact on the states’ power distribution sector as well," said Kuljit Singh, partner at accounting firm Ernst & Young.