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Overview on Universal Households Electrification in India - ‘Saubhagya’

On Sep 25, 2017 the central government launched the Pradhan Mantri Sahaj Bijli Har Ghar Yojana (or Saubhagya). The objective of the ‘Saubhagya’ scheme is to provide energy access to all by providing last mile connectivity and electricity connections to all the remaining 300 Lakhs un-electrified households (Refer Table 1) in rural as well as urban areas. In a nut-shell, it aims to achieve universal household electrification in the country. Under the Saubhagya scheme which is expected to cost about ₹16,320 crore (Refer Table 2) all poor households that have no access to electricity till date will be provided electricity connections free of cost.[1]

The Saubhagya scheme is meant to:

  • Provide last mile connectivity and electricity connections to all un-electrified households in rural areas
  • Provide Solar Photo Voltaic (SPV) based stand-alone systems for un-electrified households located in remote and inaccessible villages/ habitations where grid-extension is not feasible or cost effective
  • Provide last mile connectivity and electricity connections to all remaining economically poor un-electrified households in urban areas. Non-poor urban households are excluded from  this scheme

It is very clearly stated that there is no provision in the scheme to provide power for free to any category of consumers (even though connections may be provided for free). The cost of electricity consumption shall have to be paid by the respective consumers as per prevailing tariff of the Distribution Company (DISCOM)/Power Deptt.

The implementation of the scheme has been modelled on the Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) scheme, with Rural Electrification Corporation Limited (REC) as the nodal agency. DDUGJY was launched by Government of India with the following components:

  • Separation of agriculture and non-agriculture feeders facilitating judicious rostering of supply to agricultural & non- agricultural consumers in the rural areas;
  • Strengthening and augmentation of sub-transmission & distribution (ST&D) infrastructure in rural areas, including metering at distribution transformers, feeders and consumers end;
  • Rural electrification with completion of the targets laid down under RGGVY for 12th and 13th Plans by subsuming RGGVY in DDUGJY and carrying forward the approved outlay for RGGVY to DDUGJY.

The modelling of appointing REC as nodal agency, DPR’s formations and approval process, mode of implementation and involvement of Gram Panchayat are some of the highlights in operation for DDUGJY that have been followed for Saubhagya scheme also.

All DISCOMs including private sector DISCOMs, State Power Departments and Rural Electric Cooperative Societies shall be eligible for financial assistance under the scheme. Following is the funding pattern for the scheme[2]

:
Agency Nature of support Quantum of support provided as a percentage of project cost
Other than Special Category States Special Category States
Govt. of India Grant 60 85
Utility/ State Contribution Own Fund 10 5
Loan (FIs/Banks) Loan 30 10
Additional Grant from GoI on achievement of prescribed milestones Grant 50% of total loan component (30%) i.e. 15% 50% of total loan component (10%) i.e. 5%
Maximum Grant by GoI (including additional grant on achievement of prescribed milestones) Grant 75 90

Saubhagya focuses on households and not villages

The Saubhagya scheme considers Electricity Access in terms of households and not villages.  This is a departure from the previous approaches. Previously, a village is declared to be electrified if 10 per cent of the households are given electricity along with public places such as schools, panchayat office, health and community centers. And although India has electrified 96 per cent of its villages yet there are approximately 300 lakh people without access to electricity.

Consequently, the benefits that the scheme seeks to target are: substitution of kerosene, improvement in educational services, improvement in health services, improvement in communications, improvement in public safety, increased job opportunities, and better quality of life, especially for women, in daily chores.

Pace of the households to be electrified is aggressive

 

Average Monthly Households being electrified  338,192
Unelectrified Households targeted under the Saubhagya Scheme 30,000,000
Months to Dec’18 Deadline 15
Required Rate of electrification of  households (monthly) 2,000,000
Effort Ramp-up from current average 5.9X

 

With a deadline of 31st March 2018 and 31st Dec 2018 for getting the additional grant, the massive scale-up in monthly electrification will be a successful one only if all the learnings from Rural Electrification done under erstwhile RGGVY and DDUGJY are put to maximum use.

About 90 % of the non-electrified households are in Bihar, Uttar Pradesh, Maharashtra, Madhya Pradesh, Odisha, Jharkhand, Rajasthan, Karnataka, J & K, and North-Eastern States which have been laggards in rural electrification till date and on which the success of the Saubhagya scheme now depends. 

The next 12 months will reveal it all

The Saubhagya scheme has some positives such as provision for households outside the reach of grid lines and takes a different approach. However, the main challenge is going to be that the policy has set a standard for itself without enough focus on its capacity to deliver results. The scheme looks at electricity access beyond lighting and mobile recharging; and has bigger goals to promote livelihood enhancement through productive use. Significant results need to be shown, otherwise, Saubhagya will end up being just another political gimmick without clear benefits and possibly just messaging for an electoral purpose.

Table 1: Estimation of number of households to be electrified[3]

 

S. No. Description Number
1 Total no. of households  1796 Lakhs
2 Electrified rural households 1336 Lakhs
3 Remaining un-electrified households (1-2) 460 Lakhs
4 BPL households already sanctioned under DDUGJY and yet to be electrified 179 Lakhs
5 Balance households yet to be electrified 281 Lakhs (say 250 Lakhs)
6 Economically poor households in urban areas yet to be electrified 50 Lakhs
7 Total un-electrified households (5+6) 331 Lakhs (say 300 Lakhs)

 

Table 2: Estimation for Outlay for Saubhagya scheme[4]

a. For rural households

S. No Particulars Cost (Rs. Cr.) GBS (@75% of cost)
1

Cost of service connections to remaining households

250 Lakh HHs @ Rs. 3000/=

7500.00 5625.00
2 Cost towards providing last mile connectivity where required in 250 Lakh HHs @ Rs. 1500/= 3750.00 2812.50
3

SPV based standalone systems for HHs in remote areas

5 Lakh HHs @ Rs. 50000/=

2500.00 1875.00
4 Total 13750.00 10312.50
5 Contingencies @ 2% of Total 275.00 275.00
6 Grand Total 14025.00 10587.50

 

b. For urban households

S. No Particulars Cost (Rs. Cr.) GBS (@75% of cost)
1

Cost of service connections to remaining households

50 Lakh HHs @ Rs. 3000/=

1500.00 1125.00
2 Cost towards providing last mile connectivity where required in 50 Lakh HHs @ Rs. 1500/= 750.00 562.50
3 Total 2250.00 1687.50
4 Contingencies @ 2% of Total 45.00 45.00
5 Grand Total 2295.00 1732.50

 

c. Year-wise phasing details

Year For Rural HHS For Urban HHs

Cost (Rs. Cr)

GOI Share (Rs. Cr)

Cost (Rs. Cr)

GOI Share(Rs. Cr)

2017-18 4200.00 3100.00 700.00 500.00
2018-19* 9825.00 7487.00 1595.00 1232.00
Total 14025.00 10587.00 2295.00 1732.50

 

*All states/UTs are required to complete the works of household electrification by 31st Mar 2019. However, spillover works, if any will continue till 2021-22.

Table 3: States with most un-electrified households

Top non-electrified (NE) states
State No. of NE households All India % share
Uttar Pradesh 1,46,59,232 36.2
Bihar 64,83,909 16.0
Madhya Pradesh 44,99,405 11.1
Odisha 32,52,725 8.0
Jharkhand 30,45,691 7.5
Assam 24,12,596 6.0
Rajasthan 20,20,670 5.0
Karnataka 7,37,182 1.8
Haryana 6,82,777 1.7
Chhattisgarh 6,37,678 1.6
Total 3,84,31,865 95.0

 


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Author: sustainabilityoutlook