Challenges in Electrification of Rural India

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Bethamehi Joy Syiem

In January 2019, Government of India declared victory in rural electrification…Yet, the ground reality still reflected a different situation altogether. Last mile access to electricity is still a distant dream for millions of rural households.

As one of the most critical components of infrastructure for both social welfare and economic growth, electrification is key to the overall development of a nation. Hence, over the years, the electrification of all households has been a priority in government policies and programmes. This is why, India seems to be at the cusp of energy transformation. More households are getting electrified than ever before. However, there have been problems in the implementation of these schemes as a large number of issues regarding supply and quantity of electricity remain. In the effort of enabling access to electricity, cracks within the system have been ignored and “the goal of extending the electric grid to India’s villages has eclipsed the need to provide quality access and service” (SPI & ISEP 2019: 2). These problems are more pernicious in form in the context of rural India as the rural-urban divide continues to permeate. These challenges are examined in the following paragraphs.

PTI
Credit: PTI

Gaps in Electrification: A look at Government Schemes

28th April, 2018, saw Leisang in Manipur’s Senapati district declared as the last village to be electrified and brought onto the national power grid. This seminal moment was met with much fanfare as Prime Minister Narendra Modi’s 2015 Independence Day promise to electrify all un-electrified villages in India within 1000 days was declared fulfilled (Bhaskar 2019). However, what the fanfare hides is that in India, a “village is considered electrified if 10% of its homes and all public buildings are connected to the grid” (BBC 2018). Hence, Leisang, by that definition, was electrified in 2018. This came under the ‘Deendayal Upadhyaya Gram Jyoti Yojana’ (DDUGJY) scheme launched by the Government of India in 2015 to provide power supply to all villages in rural India.

On a similar note, the target-based Saubhagya Scheme or the Pradhan Mantri Sahaj Bijli Har Ghar Yojana was launched in 2017. Its primary aim was to complete the electrification process by December 2018. Further, a deadline was set for all households to be electrified by December 2019. Under the scheme, beneficiaries are identified using the Socio Economic and Caste Census (SECC) 2011 data and eligible households are provided electricity connections free of cost (Mishra 2017). In January 2019, Government of India declared victory in rural electrification. According to widespread media coverage, Prime Minister Modi’s Saubhagya scheme – free or heavily subsidized connections –- had met its goal of electrifying all Indian households a few months before the official deadline. Yet, the ground reality still reflected a different situation altogether. Last mile access to electricity is still a distant dream for millions of rural households. How can the government announce the completion of Saubhagya if so many remain without electricity? A number of reasons may be noted.

When the Saubhagya scheme was started in September 2017, government surveys estimated 40 million households without power. However, new definitions estimate only 25 million households without electricity. These changing definitions explain how Saubhagya has met its official goals yet rural electrification is not complete in India

The Case of the Missing Households

In assessing 100% electrification of households, the question of how a household is defined becomes important. The census defines a household as “a group of persons who normally live together and take their meals from a common kitchen, unless the exigencies of work prevent any of them from doing so” (qtd. in Dsouza 2019: 35). As per census 2011, the number of normal households were 24,84,08,494. The Saubhagya portal (as of 14th June, 2020) shows the total number of households at 21,44,91,777 (Saubhaya 2020). This observation goes to show that despite the increase in population since 2011, the total number of households according to the Saubhaya portal seems to have decreased by 3,39,16,717.

Another interesting observation is that of changing definitions. When the Saubhagya scheme was started in September 2017, government surveys estimated 40 million households without power. However, new definitions estimate only 25 million households without electricity. These changing definitions explain how Saubhagya has met its official goals yet rural electrification is not complete in India (Urpelainen 2019). Other problems noted by a research team of the Initiative for Sustainable Energy Policy (ISEP) in the state of Uttar Pradesh are as follows:

  1. In some cases, rural electrification teams simply missed households. A number of household heads said nobody had visited them to offer an electricity connection.
  2. Rural electrification teams chose to ignore illegal connections. If a household was tapping into the electric grid without a legal connection, the rural electrification teams simply moved on to the next household.
  3. Most importantly, the government changed the goals of rural electrification by ignoring any household that was unwilling to pay electricity bills (Urpelainen 2019).

A big reason for low-quality electricity supply is the financial health of the power distribution companies (power DISCOMs)…Low tariffs mandated by governments, electricity theft and weak infrastructure mean that state power DISCOMs are burdened by losses and debts

Financial Sustainability Angle: DISCOMs

Despite obvious problems in implementation of electrification problems, one cannot deny that the number of households that have been electrified have indeed been increased. However, another important challenge comes to the forefront with the increase in electrification– the question of ‘quality’ of electricity. Across the country, there are significant disparities in the number of hours households get electricity. A Council on Energy, Environment and Water (CEEW) survey in 2019 revealed that while West Bengal households get 20 hours of power supply on average, Jharkhand households receive only 9 hours (CEEW 2019).

A big reason for low-quality electricity supply is the financial health of the power distribution companies (power DISCOMs), which are responsible for distributing electricity at the state level. Low tariffs mandated by governments, electricity theft and weak infrastructure mean that state power DISCOMs are burdened by losses and debts. Dsouza (2019: 35-36) opines that the DISCOMs are under further stress with the increased connections, stating,

what becomes necessary is to integrate the policies on electrification and the ones on improving the financial health and technical capacity of DISCOMs as well as improving the generation supply chain.

One of the major impediments to rural electrification is the lack of incentivisation to DISCOMs. Despite the “positive correlation between reliable electricity and an increase in electricity usage and people’s willingness to pay” (Koshy 2018), the Saubhaya scheme has failed in to incentivise DISCOMs to refine their electricity supply. This is because it does not account for households’ inability to pay and neither did it make provisions for the encouragement of micro-enterprises or income generating opportunities that would allow rural consumers to afford their electricity connections. This is further aggravated by the ‘psychology of free power’ among most rural consumers as they believe that power as a social good is a right rather than a paid commodity (Banerjee et al. 2014, PWC 2018: 18-20).

Linked to this challenge of limited incentivisation are other capital related obstacles to last mile connectivity. This includes technical challenges that crop up in topologically difficult terrain and the scattered nature of households in rural areas. This comes with high capital investment costs, high operation and maintenance challenges along with, low revenue potential and the lack of affordable financing. Initiatives like the Ujwal DISCOM Assurance Yojana (UDAY) scheme to cut debts and assist failing DISCOMs are welcome but more needs to be done so that they can service existing and new consumers continuously. To sum it up, India needs to first restore the financial health of its power sector in order to successfully ensure 100% electrification.

The role of government schemes is undeniably significant but the government needs to move away from target-based schemes that incentivise the declaration of improvement and progress without a reflection in the ground reality

Meghalaya Example

The state of Meghalaya is a prime example of the kinds of challenges elucidated in the previous sections. Many of its rural areas are remote, inaccessible and topographically challenging. To improve accountability and reduce losses in the Power Sector, the Govt of Meghalaya unbundled its State Electricity Board into four corporations under Meghalaya Power Sector Reforms Transfer Scheme 2010. The Meghalaya Energy Corporation Limited (Me.E.C.L), acts as the ‘holding company’ among these. However, as of now, the MeCL has pending power dues up to Rs 622 crores to the centrally owned North East Electric Power Corporation (NEEPCO). Since August of 2019, the MeCL began to repay NEEPCO daily at Rs 65 lakh. Yet the state continues to face daily power cuts and the consumers continue to face the brunt of it (Sentinel Digital Desk 2019, Dey 2013).

According to the government, all 6,459 census villages stand electrified. Yet, discrepancies are glaring. In July 2019, more than 1400 villages were still left with un-electrified households (Bhattacharjee 2019). Following this, the Indian National Congress, then opposition party in the state, demanded an independent inquiry into the scheme implementation alleging that the implementation was a “big scam” (qtd. in IANS 2019). In November 2019, protests were held against the ruling NPP govt in Tura District claiming only 30-40% electrification despite the 100% electrification claimed under Saubhagya (IANS 2019). Till today, many villages get few hours of electricity with load shedding between 4-8 hours regularly. Even the capital city of Shillong faces a daily load shedding of 2 hours and some days, even more (Telegraph 2020).

Conclusion

What is clear is that the power sector in India needs a thorough reform and without fixing the existing systemic issues of DISCOMs (high losses, low revenue generation, mounting debts and gaps in monitoring connections), it is impossible to ensure last mile connectivity and quality of access. It is also important to enable the participation of all stakeholders apart from government, i.e. regulatory bodies, DISCOMs, domestic consumers, industries, agriculturists, etc. to ensure that reform strategies are comprehensive and inclusive. The role of government schemes is undeniably significant but the government needs to move away from target-based schemes that incentivise the declaration of improvement and progress without a reflection in the ground reality.


A graduate from St. Stephen’s College, New Delhi, Bethamehi Joy Syiem is currently pursuing her Master’s in Public Policy at NLSIU, Bangalore. Her core interests lay in social justice, gender, sustainability and traditional ecological knowledge building (TEK). Outside of research and policy advocacy, Beth is passionate about cats, baking and soft pastel art. You can usually find her sipping lemon tea at Chetta’s and otherwise. She can be reached at bethamehi@nls.ac.in.


References

Banerjee, Sudeshna et al. 2015. Power for All: Electricity Access Challenge in India. World Bank. Washington DC.

Bhattacharjee, Purbasha. 2019. “Over 1,400 Villages in Meghalaya Still to Be Fully Electrified under Centre’s Saubhaya Scheme.” News 18. https://www.news18.com/news/india/over-1400-villages-in-meghalaya-still-to-be-fully-electrified-under-centres-saubhagya-scheme-2242967.html. (Accessed on 19th May, 2020).

Bhaskar, Utpal. 2019. “All villages electrified, but last-mile supply a challenge.” LiveMint. https://www.livemint.com/industry/energy/all-villages-electrified-but-last-mile-supply-a-challenge-11577642738875.html. (Accessed on 20th May, 2020).

BBC. 2018. “India says all villages have electricity.” British Broadcasting Channel. https://www.bbc.com/news/world-asia-india43946049#:~:text=A%20village%20is%20considered%20electrified,now%20been%20given%20electricity%20connection. (Accessed on 21st May, 2020).

Council on Energy, Environment and Water (CEEW). 2019. “Key Findings on Electricity Access.” https://www.ceehttps://www.sentinelassam.com/wp-content/uploads/2019/05/MEGHALAYA.jpgw.in/news/key-findings-electricity-access. (Accessed on 20th May, 2020).

Dey, Supratim. 2013. “Meghalaya power board unbundled into 4 entities.” Business Standard. January 21, 2013. https://www.business-standard.com/article/companies/meghalaya-power-board-unbundled-into-4-entities-110051500006_1.html. (Accessed on 10th May, 2020).

Koshy, Shweta Miriam. 2018. “Saubhagya scheme: In pursuit of 100% electrification.” DownToEarth. 05 February 2018. https://www.downtoearth.org.in/blog/energy/saubhagya-scheme-in-pursuit-of-100- electrification-59625. (Accessed on 13th June, 2020).

Mishra, Prachee. 2017. “Electrification in India: ‘Saubhagya’ scheme.” PRS Legislative Research. https://www.prsindia.org/theprsblog/electrification-india-%E2%80%98saubhagya%E2%80%99-scheme. (Accessed on 1st June, 2020).

IANS. 2019. “Meghalaya rejects Cong plea for probe into power scheme.” Outlook: The News Scroll. September 13, 2019. https://www.outlookindia.com/newsscroll/meghalaya-rejects-cong-plea-for-probe-into-power-scheme/1618493. (Accessed on 20th May, 2020).

PWC. 2018. Reaching the last mile. 7th Energy Congress. Energy 4.0: Energy transition towards 2030. New Delhi. February 1-2, 2018.

Saubhaya. 2020. “Household Electrification Status.” https://saubhagya.gov.in/. (Accessed on 14th June, 2020).

Sentinel Digital Desk. 2019. “Meghalaya Facing Acute Power Crisis.” The Sentinel. https://www.sentinelassam.com/north-east-india-news/meghalaya-news/meghalaya-facing-acute-power-crisis/?infinitescroll=1. (Accessed on 11th May, 2020).

Smart Power India (SPI) and Initiative for Sustainable Energy (ISEP). 2019. Rural Electrification in India: Consumer Behaviour and Demand. The Rockefeller Foundation. February 2019. Telegraph. 2020. “Load-shedding hours cut from eight to two.” The Telegraph India. January 21, 2020. https://www.telegraphindia.com/states/north-east/load-shedding-hours-cut-from-eight-to-two/cid/1737449. (Accessed on 10th June, 2020).

Urpelainen, Johannes. 2019. “Universal Rural Electrification in India? Not So Fast.” Power For All. https://www.powerforall.org/countries/india/universal-rural-electrification-india-not-so-fast. (Accessed on 19th May, 2020).


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  1. Beautifully crafted piece on a critical topic! Well done Bethamehi!

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