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Rural Electrification Under the RGGVY
Context:
- A new study found that rural electrification under the RGGVY doubled per capita monthly expenditures and a 10% rise in the number of firms in large villages.
- Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) was launched in 2005 under UPA-1 to provide electricity to over 4 lakh rural villages, targeting families below the poverty line (BPL) across 27 states.
Key Findings of the Study:
- Electrification Boost in Large Villages: Larger villages (2,000+ people) saw significant economic gains:
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- Per capita monthly expenditure increased by Rs 1,428.
- 10% rise in the number of firms.
- 9% increase in firm employment.
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- No Significant Impact in Small Villages: In smaller villages (~300 people), electrification did not lead to:
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- Noticeable economic growth.
- Change in per capita expenditure.
- Increase in business activities or employment.
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- Return on Investment (ROI):
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- Large Villages: A 33% ROI over 20 years.
- Small Villages: No positive ROI observed.
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- Economic Disparities: The benefits of electrification were more substantial in larger villages, highlighting that small villages could not translate improved infrastructure into economic growth.
- Cost-Effectiveness of Electrification: Electrification in large villages was cost-effective with high returns.
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- Small villages are better suited for alternative solutions like solar home systems or mini-grids due to high electrification costs and limited benefits.
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- Policy Implications: A one-size-fits-all approach to electrification is ineffective.
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- Tailored strategies based on village size and existing economic structures are recommended.
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Current Status of Rural Electrification:
- Village Electrification: By April 2018, the Indian government announced that all villages were electrified, meaning at least 10% of households in each village had access to electricity.
- Household Electrification: As of March 31, 2022, around 28.6 million households were electrified under various schemes, yet approximately 13% of households, especially in rural areas, still lacked reliable electricity connections due to affordability and service quality issues.
- Quality of Supply: Despite electrification, rural households face significant challenges with electricity quality and reliability, experiencing average outages of 90 minutes compared to just 21 minutes in urban areas, often due to subsidised and inconsistent supply.
Government Initiatives:
To address the challenges of rural electrification, the Indian government has implemented several schemes:
- Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY): Launched in December 2014 to electrify all un-electrified villages and enhance power distribution infrastructure in rural areas.
- Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya): Launched in October 2017 to achieve universal household electrification by providing connections to all willing, un-electrified households in rural and urban areas.
- Renewable Energy Initiatives: The government promotes decentralised renewable energy systems, such as solar photovoltaic (PV) systems, to improve electricity access in remote areas where extending the grid is unfeasible.
