RAJIV GANDHI GRAMIN VIDYUTIKARAN YOJANA

Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) a scheme for Rural Electricity Infrastructure &

Household Electrification was launched in April-05 by merging all ongoing schemes . Under the

program 90% grant is provided by Govt. of India and 10% as loan by REC to the State Governments.

REC is made the nodal agency for the program.

RGGVY also known as National Common Minimum Program (NCMP) aims at electrifying over 1 lakh

villages and habitations as per new definition .Provide access to electricity to all households . Give

electricity connection to 2.34cr Below Poverty Line (BPL) families free of charge.

To meet above mentioned objectives under this scheme there was dire need of basic infrastructure

which was lagging . To make the upper scheme viable following infrastructure support needs to

given :

1. Rural Electrification Distribution Backbone (REDB) with 33/11 KV ( or 66/11 KV) sub-station of

adequate capacity in blocks where these do not exist.

2. Village Electrification Infrastructure (VEL) with provision of distribution transformer of appropriate

capacity in villages/habitations.

RGGVY RAJEEV GANDHI GRAMEEN VIDYUTIKARAN YOJANA

PREPARED BY,

Group 15

AXIT JAIN

JAYARAMAN G.

PARESH N.R.

SAURAV SHRIDHAR

VIPUL TIWARI

[Electrification of all villages and habitations as per new definition .Providing access to electricity to all rural households. Providing Electricity Connection to BPL families free of charge.

2013

3/15/2013

INDEX

Contents Page No.

1 .Introduction 03

2. Rural Electrification 07

3. Future Trends 09

4. Recommendations 11

5. Conclusion 13

6. References 14

Rajiv Gandhi Grameen Vidyutikaran Yojana

1. Introduction

Rajiv Gandhi Grameen Vidyutikaran Yojana was launched on 4th April, 2005 and was aimed at

building rural electricity infrastructure and household electrification towards the National Common

Minimum Programme goal of access to electricity for all. Rural Electrification Corporation

Limited (REC) is the nodal agency for the programme. Ministry of Power launched Rajiv Gandhi

Grameen Vidyutikaran Yojana (RGGVY) as one of its flagship programme in March 2005 with the

objective of electrifying over one lakh un-electrified villages and to provide free electricity

connections to 2.34 Crore rural BPL households. This programme has been brought under the ambit

of Bharat Nirman.

2. RGGVY Objectives

Electrifying all villages and habitations as per new definition

Providing access to electricity to all rural households

Providing electricity Connection to Below Poverty Line (BPL) families, free of charge.

3. Programme Scheme

Under this scheme 90% capital subsidy would be provided for projects for:

1. Creation of Rural Electricity Distribution Backbone (REDB) with 33/11 KV (or 66/11 KV) substation in every block appropriately linked to the State Transmission System. 2. Creation of Village Electricity Infrastructure (VEI) for electrification of all unelectrified villages/habitations and provision of distribution transformer(s) of appropriate capacity in every village/habitation. 3. Decentralized Distributed Generation (DDG) Systems based on conventional & non conventional energy sources where grid supply is not feasible or cost-effective.

As objective of RGGVY was made clear and to support that objective infrastructure that was required

was also notified then the only thing that was left was what methodology to be implemented to

make this objective achieved.

4. Implementation Methodology and Conditions under RGGVY:

1. Preparation of District based detailed projects reports of execution on turnkey basis.

2. Involvement of central PSU undertakings of Power Ministry in implementation of some projects.

3. Certifications of electrified village by the concerned Gram Panchayat.

4. Deployment of franchisee for the management of rural distribution for better consumer service

and reduction in losses.

5. Undertakings by States for supply of electricity with minimum supply of 6-8hrs of electricity in the

RGGVY network.

6. Making provision of requisite revenue subsidy by state.

7. Three tier quality monitoring Mechanism for XI Plan Schemes made mandatory

8. Web based monitoring of progress.

9. Release of funds linked to achievements of pre-determined milestones.

10. Electronic transfer of funds right up to the contractor level.

11. Notification of Rural Electrification Plans by the State Governments.

Source: http://rggvy.gov.in

.

Source: http://rggvy.gov.in

Prior to October 1997: A village should be classified as electrified if electricity is being used within its

revenue area for any purpose whatsoever.

After October 1997 : A village will be deemed to be electrified if the electricity is used in the

inhabitated locality , within the revenue boundary of the village , for any purpose whatsoever .

New Definition : A village will be declared as electrified if :

i) Basic infrastructure such as distribution transformer and distribution lines are provided in the

inhabited locality as well as the dalit basti/hamlet where it exists . ( For electrification through Non-

Conventional Energy Sources a distribution transformer may not be necessary ) .

ii) Electricity is provided to public places like schools , panchayat offices , health centres ,

dispensaries , community centres etc.

iii) The number of households electrified should be at least 10% of the total number of households in

the village

ROLL OUT PLAN FOR VILLAGE ELECTRIFICATION

STATUS AS ON 15/2/2013 ;Source : rggvy.gov.in/rggvy/rggvyportal/plgsheet_frame3.jsp

Salient Features of Quadripartite Agreement amongst REC , State Governments , State Power

Utilities and CPSUs :

The agreement defines :

1. The role and responsibilities of the parties concerned .

2. The environment for effective implementation of projects.

3. The creation of a suitable interface for activities .

4. The recipient of capital subsidy and loan assistance ie. State Governments .

5. Commitment of the State Government and State Utility to introduction of a revenue sustainable

franchisee arrangement prior to project completion and provision of targeted and upfront subsidies

as required .

6. The mechanism for release of funds by REC directly to the implementation agency .

4. Goal Achieved So far

Under Phase-1 of RGGVY, Ministry of Power has sanctioned 576 projects for 546 districts to electrify

1,10,886 villages and to provide free electricity connections to 2.29cr BPL rural households . As on

31st Dec 2012, works in 1,06,335 villages have been completed and 204.47 lakh free electricity

connections have been released to BPL households .

72 projects under Phase-2 covering electrification of 1909 un-electrified villages , 46606 un-

electrified habitations , 53,505 partially electrified villages , 25,947 partially electrified habitations

and release of free electricity connections to 45,59,141 BPL households have also been sanctioned

with an outlay of Rs. 7964.32cr

5. Recent Happenings

Indian Government has targeted 2017 as the year in which 5,74,000 households would get

electrified. Recently our Honourable Power Minister Jyotiraditya Scindia has requested the finance

ministry to allocate a fund of Rs36000Cr under the 12th Five Year Plan for this programme. It is also

proposed to enhance BPL load from the range of 40-60 Watt to 250 Watt and to provide LED in each

BPL household. The 12th Plan also proposes to have a separate new scheme for productive loads,

mainly agricultural loads.

The rural electrification work under Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) would be

completed in 4754 villages of eight districts by June, 2013, announced energy minister Bijendra

Prasad Yadav in the legislative council on Tuesday. He said the agency engaged in the RGGVY work

would be penalized if it failed to meet the deadline. Replying to a question of Kedar Nath Pandey

(CPI), Yadav said 90% work has to be completed by March this year.

6. RURAL ELCTRIFICATION – a new perspective.

In rural India , 24-hour supply of electricity is necessary for broad based economic and human

development – going beyond increasing agriculture production through irrigation .

Features of RGGVY:

1. 90% capital subsidy would be provided by the Central Government for overall cost of the project

2. The scheme would create the necessary infrastructure through:

a) Rural Electrification Distribution Backbone (REDB) with 33/11 KV (or 66/11 KV) sub-station of

adequate capacity in blocks where these do not exist.

b). Village Electrification Infrastructure (VEL) with provision of distribution transformer of

appropriate capacity in villages/habitations.

c). Decentralized Distributed Generation (DDG) Systems based on conventional & non conventional

energy sources where grid supply is not feasible or cost-effective.

3. Below Poverty Line (BPL) households to get electricity connection free of charge.

4. Revenue sustainability of electricity supply to be ensured through franchisee, who could be NGOs

, user associations , co-operatives or individual entrepreneurs with association of panchayati raj

institutions .

5. No discrimination in hours of supply between rural and urban households.

6. Service of CPSU’s made available to states willing to utilize their services for implementation of

the programme.

7. This scheme merges the existing “Accelerated Electrification of One lakh villages and one crore

households “and the Minimum Needs Programme for rural electrification.

7. Need for Rural Electrification

India being one of the largest country in the world and also has world’s second largest population of

about 121cr. In India’s population of 121cr about 70% live in rural India that is in villages and about

35cr people are below poverty line.

Rural Electrification is not important for lighting and household purposes but it also allows

mechanization of many farming operations, such as threshing, milking, and hoisting grain for

storage. In areas facing labour shortages, this allows for greater productivity at reduced cost.

The Rural Economy in India is wholly agriculture based and it is of tremendous importance because it

has vital supply and demand links with the other Indian industries. Agriculture is the main stay of the

Indian economy, as it constitutes the backbone of rural India with inhabitants more than 70% of

total Indian population. The fertility of the soil has augmented the success of agriculture in India.

Further, Rural Economy in India has been playing an important role towards the overall economic

growth and social growth of India. Agriculture accounts for almost 19% of Indian gross domestic

products (GDP).

Viable and reliable electricity services would result in increased productivity in

a) Agriculture and labour,

b) Improvement in the delivery of health and education,

c) Access to communications (radio, telephone, television, mobile telephone),

d) Improved lighting after sunset,

e) Facilitating the use of time and energy-saving mills, motors, and pumps, and

f) Increasing public safety through outdoor lighting.

Rural electrification at a household level provides at the very minimum services such as lighting and

communications (e.g. radio/television) and can increasingly meet the aspirations of the rural

populations to own other household appliances. Household electrification also increases the

likelihood that women will read and earn income.

Thus to implement rural electrification on a broad and larger scale government funds would be

needed to incentivize the projects taken by people or companies as revenue realization may not be

up to mark from villagers.

8. Negative and Positive Aspects

Rural Electrification programme like RGGVY have both positive and negative aspects attached to it.

There are a lot of positive effects of the programme like it helps farmers for their irrigation,

improvement in lighting facilities, improvement in infrastructure which leads to better educational

facilities, better adaptation of technology for farming, better health and sanitation facilities like

clean drinking water can be made available to them by installing water treatment plants etc. All in all

it creates jobs for the villagers and thus stops them from moving out to the cities thus reducing the

burden on urban cities.

As mentioned one needs to acknowledge that irrigation reduces poverty by increasing employment,

incomes and real wages and by reducing food prices for rural and urban poor. In India, in un-

irrigated districts (less than 10% area irrigated), 69 % of people are poor, while in irrigated districts

(more than 50% area irrigated), poverty level drops to 26%. Agricultural performance is fundamental

irrigated), poverty level drops to 26%. Agricultural performance is fundamental to India's economic

and social development and will critically determine the success of efforts in poverty reduction.

Now if we talk about the negative aspects there are not as many as compared to the positive aspects

but there are some major issues.

Farmers being provided free electricity as most of them lie under BPL. They use pumps for

agriculture and they are a lot of pumps used in India for this. It is assumed that there are around 2cr

pumps used for irrigation purpose only. Thus they use a lot of electricity for free and this has been

cited by many as one of the principle causes of poor cost recovery of SEBs and a prime cause of the

poor financial health of the SEBs.

Due to the free electricity provided to the farmers they use the pump to pump out water more than

what is required and thus resulting in lowering of ground water table.

9. Future Trends

We have been seeing that in the previous few years there has been much stress on solar and other

renewable forms of energy like wind, geothermal, biofuels etc because for of our depleting fossil fuel

reserves. Of all this solar energy is the most advantageous because it can be installed at the

consumers end and can be used then and there. This type of off grid system can be used to electrify

the villages and we can save upon cost as we would not need the transmission lines to be laid to

bring power to the consumers end. Modern Concepts like Off Grid, Mini Grid Systems can be used to

electrify the villages.

There can be three basic technical approaches to bring electricity to remote areas:

1) National grid. Rural areas are normally located far from the national grid; therefore the high cost

of extending the transmission lines usually makes these projects unfeasible. Rural areas are vast and

have relatively small energy demand per connection; for public authorities or very impoverished

utilities there is little economic interest in grid connection. Furthermore, the electricity provided by

utilities in developing countries often lack security of supply and quality. Consumers may only have

access to the electricity during limited hours each day and blackouts or brownouts are common. Grid

extension increases the demand, but if there is not a consequent increase in the energy generation

capacity, adding new consumers only aggravates the situation and reduces the quality of the service.

2) Energy Home Systems (EHS). These small power systems are designed to power individual

households or small buildings and provide an easily accessible, relatively cheap and easy to maintain

solution. The dispersed character of rural settlements is an ideal setting for these solutions, in

particular with renewable energies (RE) that are especially competitive in remote areas. Pico PV

system (PPS), solar home systems (SHS), small hydro plants (SHP), or wind home systems (WHS)

almost always offer a potential solution for providing electricity to isolated places. In these stand-

alone systems, power generation is installed close to the load and there are no transmission and

distribution costs. Moreover, to keep prices affordable, components can be minimized and

capacities maintained low mainly serving small DC appliances for lighting and communication.

3) Mini-grids (sometimes referred to as isolated grid) provide centralized electricity generation at

the local level, using village-wide distribution networks not connected to the main national grid.

Mini-grids mostly use low AC current (230 or 155V), with a centralized production and storage with

an installed capacity between 5 and 50 kW although larger systems exist. Mini-grids provide capacity

for both domestic appliances and local businesses, and have the potential to become one of the

most powerful technological approaches for accelerated rural electrification. They can be powered

by fossil fuel (mostly diesel), but they also lend themselves for utilizing local renewable energy (RE)

resources. Diesel remains the most used technology because it used to be the cheapest option and it

requires rather modest initial investments. However, RE present numerous competitive advantages

including lower cost.

A hybrid power system uses RE as a primary source and a genset (most of the time diesel but

potentially with gasoline and LPG) as back up. This solution is especially interesting for isolated

villages/small towns, away from the national electricity grid. Moreover, they provide enough power

to satisfy modern domestic needs (lighting, communication, refrigeration, water supply) as well as

public services (health centres, schools etc.) and the development of a local economy (small

industries, related services such as telecommunication towers and water irrigation systems etc).

Finally, the implementation of mini-grids has proved to have a positive social impact by fostering and

improving local governance structures through the involvement of the community in the decision-

making linked with the energy system.

A hybrid system can use several RE technologies and balance the specific advantages and

shortcoming of each resource. Small hydropower continuously produces costs competitive electricity

for villages close to water resources, but is very site specific and may be dependant on seasonal

effects. As solar resources are abundant, PV can be used almost everywhere, especially in Southern

countries, but has rather high requirements for storage since there is no generation after nightfall.

The generation of WHS follows the site-specific wind profile over the year. Diesel, gasoline, and LPG

generators can be added as complementary sources to ensure the continuity of supply and maximize

the lifetime of components by reducing the stress on the overall system thus reducing the overall

costs.

Hybrid mini-grids are in many cases the most economical solution for village electrification.

Numerous studies and simulations have shown that they are competitive in comparison with

conventional energy supply systems based on fossil fuels.

10. Recommendations

There was overwhelming response from people that government must change its approach on the

RGGVY programme. Based on the recommendations from various stakeholders, a few major policy

approaches to make the RGGVY a success, are;

Decentralisation of electricity through decentralised renewable energy (DRE)

Throughout the social audit, there was a demand to incorporate decentralised planning and

implementation in rural electrification and DRE was favoured in this regard. It was agreed that DRE

could play a strong role in providing energy access to people and plug in the demand-supply gap that

is experienced in rural areas. Consequently, a clear demand for rapid uptake of decentralised

renewable energy generation units (off-grid & on grid) in the RGGVY operational areas, with a target

of 25% of resources for these projects, emerged from the discussions. It was concurred that DRE

should not be limited to off-grid areas but on-grid areas experiencing irregular supply and peak hour

shortages, should also be considered for DRE. The lack of understanding on DRE, lacunas in policy for

DDG/DRE projects and inadequate support for its implementation constrains its successful

replication. Hence, DRE needs to be supported by creating appropriate regulatory framework for its

better implementation. Thus, electrification should not aim only at top-down centralised grid

extension but should also support bottom-up electricity infrastructure to aid the larger

electrification process.

Holistic inclusion for better results

While on paper RGGVY has progressed well with village electrification, the household electrification

is lagging far behind. The faulty convergence of AREP with RGGVY has left out many BPL families,

and APL families too have found themselves outside the purview of the scheme. This has resulted in

large scale theft and blow to the newly created infrastructure. Thus, the scheme should target 100%

electrification of a village, instead of phase-wise electrification of villages. Furthermore, the latest

census figures should be used for determining household electrification in a village. On the other

hand, focus on household electrification and exclusion of other rural needs, has minimised the

impact of RGGVY on rural populace. To have the desired impact on rural development, it is

important to view electrification in the context of larger development patterns. Thus, inclusion of

support to the overall development of village economy needs to be incorporated. Besides, provisions

need to be made for energy requirement for irrigation and medium and small scale industries.

Strengthening the implementation

A centralised scheme such as RGGVY does not incorporate regional demands and variations.

Therefore, regional consultations brought out the need for involving state governments in all stages

of the programme, right from the designing to the implementation stage. The states should be

allowed to incorporate changes according to their respective electricity situations and the role of the

central government should be restricted to providing support in terms of resources and technology

to the states. Involvement of Panchayati Raj Institutions (PRIs) should be made mandatory for better

implementation and sustainability of the scheme.

So far their role is restricted to providing the lists of BPL families and signing of electrification

certificates. PRIs should be involved during planning, implementation, selection of franchisees and

monitoring of the scheme.

Enhancing monitoring and accountability

Embedding the social audit component in the scheme is necessary to enhance accountability of the

implementation system. Social audits should be strengthened by involving communities and civil

society organisations in the process. Proactive display of information for public, such as budget

outlay, number of beneficiaries, franchisee etc. should be made mandatory. Presently, the boards in

the villages display only the electrification status of the village and while detailed information is

uploaded on the website. Under Section 4 (1) b of the RTI Act 2005, proactive disclosure should be

made available with each public authority/department. There should be separate cell for grievance

redressal at the PRI and electricity board offices for RGGVY. Clear-cut guidelines should be issued for

the action taken on the grievances.

Issues which affected smooth implementation of RGGVY ;

1). Delay in receipt of Detailed Project Report (DPRs)

2). Delay in forest clearance , land acquisition .

3). Few number of good agencies able to execute turnkey job .

4). Lack of awareness among villagers for taking new connection .

5). Delays in the issue of road permit and way bills .

6). Delay in Panchayat certificates for village electrification as per revised definition .

12. Conclusion

Access to electricity is considered a basic indicator of rural development. It affects all aspects of

development -- social, economic and environmental - including livelihoods, access to water,

agricultural productivity, health, population levels, education, and gender-related issues. Energy

services are essential to both social and economic development.

The energy paradigm in India was built on the principle that large centralised power plants could

achieve economies of scale, which would make them the least expensive sources of electricity.

Access to electricity in rural areas has been regarded synonymous with rural electrification,

implemented through the extension of the grid. The problems of high transmission and distribution

losses; frequent disruption in supply of grid power, practical difficulties and financial non-viability of

extending grid to remote and inaccessible areas; dispersed population in small villages resulting in

low peak loads, poor financial health of the state electricity boards, etc. are plaguing the rural

electrification programme in India. Furthermore, there is a large body of evidence to show that the

centralised system has not been able to balance demand and supply, resulting in inequities and

environmental degradation, leaving over 40% of the Indian rural population with no access to

power.

While the RGGVY scheme had raised expectations of people with no access to electricity but lack of

quality and unreliable electricity supply has underlined that the scheme has failed to deliver so far

and has also failed to match the expectations created. The principle behind the planning of this

scheme, which is to build a centralised electricity network to ensure access to power, is flawed. With

limited resources of fossil fuels, it would become an impossible proposition to supply both rural and

urban fractions of this country with reliable and quality energy supply.

Wider use of distributed electrification in a manner that meets household and local needs requires a

new vision, one that moves beyond a focus on basic area electrification and on particular

technologies. Electrification should be based on the diversity of local needs, decision-making

processes and area-specific requirements for electricity to improve productive activities. At the same

time, new regulatory mechanisms have to take into account the particular nature of the distributed

systems.

13. References

http://rggvy.gov.in/

http://www.commodityonline.com/news/rggvy-helps-indian-villages-to-move-from-

darkness-to-light-47187-3-47188.html

http://doc.utwente.nl/38683/1/t0000008.pdf

http://indianpowersector.com/home/tag/rggvy/

http://www.commodityonline.com/news/rggvy-helps-indian-villages-to-move-from-

darkness-to-light-47187-3-47188.html