India has four crore unelectrified rural households. This is more than the total number of households in Europe’s biggest economy, Germany, and more than double the households in Canada and South Korea. The year 2022, the 75th anniversary of Indian independence, has been earmarked for achieving ‘24x7 Power for All’. Achieving this target would mean electrifying more than 7 lakh households every month!

While the task is daunting, the Government has made steady progress in recent years. Data from the power ministry’s GARV-2 portal suggest that the Government has electrified more than three-fourths of the remaining 18,000-plus unelectrified villages since it came to power in 2014. Recently, the Government has also shifted focus from village electrification, which required only 10 per cent of the households in a village to be electrified, to electrifying every household.

However, providing an electricity connection to every household does not guarantee electricity access. In 2015, the Council on Energy, Environment and Water (CEEW), in association with Columbia University, conducted ACCESS, the largest-of-its-kind energy access survey covering almost 8,600 rural households in the six most energy-deprived States of India. Survey findings from Uttar Pradesh, Bihar, Jharkhand, West Bengal, Madhya Pradesh, and Odisha highlighted that while most of the villages and more than two-thirds of the households had electricity connections, less than 40 per cent had meaningful access to electricity. Many rural consumers were displeased with the poor power supply and cited reliability, quality, duration, and affordability as key concerns.

Possible priorities

A concrete action plan should include certain priorities. Firstly, legalise existing connections. In the case of unelectrified households, providing connections is the basic step for the discom and the State. In Madhya Pradesh, Jharkhand, Uttar Pradesh, and Odisha, the higher electrification rate could partly be due to the presence of illegal connections, and legalising these would help the Government move closer to its target.

Secondly, improve uptake of connections by addressing cashflow hurdles, awareness barriers, and supply challenges. High upfront cost is the major reason behind consumer disinterest in taking up an electricity connection. 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. Empowering and encouraging local authorities to organise awareness campaigns and enrolment camps in habitations exhibiting limited awareness are also essential for increasing uptake of connections. Bihar is a fine example of improving consumer uptake, providing low-cost EMI-based connections to APL families, and conducting awareness campaigns. Improving duration of supply and ensuring prompt troubleshooting of technical problems are equally important.

Performance and expectation

Thirdly, improve the supply situation for electrified households. In Bihar, Jharkhand and Uttar Pradesh, more than one-third of electrified households received less than four hours of supply during the day. Also, more than one-third households experienced at least four days of voltage fluctuations in a month. DISCOMs need to better plan for their infrastructure, factoring in near-term increase in demand, strengthening maintenance, and improving supply.

Fourthly, explore innovative business models. Managing rural customers, particularly in remote areas, is a challenge. Maintenance and operations such as reading meters, generating bills, and collecting revenues, are key concerns. To better manage their services, discoms could explore a franchisee model by collaborating with local mini-grid operators. A potential business model involves mini-grids importing grid electricity and supplementing with their own generation during times of peak demand. This kind of tail-end generation model would ensure improved electricity supply for the household, and enable DISCOMs to collect payments from a single entity.

Fifthly, cater to people’s aspirations. This will create a willingness to pay for the service. In a favourable political atmosphere, if rural households were to be provided quality supply via prepaid metering, it could potentially nudge them to make timely payments. Uttar Pradesh and Haryana are considering procuring 50 lakh smart meters in a model resembling the LED success story. Advanced market commitments and large-scale procurement could drive down prices.

Former power minister Piyush Goyal acknowledged that success depends on curbing discom losses and consumer honesty. Distributed generation could complement centralised grid electricity to resolve both, and ensure sustained use of electricity not just for rural households, but also for the entire rural economy including farms, schools, hospitals, and small businesses. It would lead to improved consumer satisfaction, as electricity truly becomes an enabler of prosperity in rural India.

The writer is a programme associate at the Council on Energy, Environment and Water