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Rural electrification

Policies and schemes related to rural electrification are given in this section.

When is a village called an Electrified Village?

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

New definition of village electrification came into effect from the year 2004-05. (Issued by MOP, vide their letter No. 42/1/2001-D(RE) dated 5th February 2004 and its corrigendum vide letter no. 42/1/2001-D(RE) dated 17th February 2004.)

As per the new definition, a village would be declared as electrified, if :

  • 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.
  • Electricity is provided to public places like Schools, Panchayat Office, Health Centers, Dispensaries,Community centers etc.
  • The number of households electrified should be at least 10% of the total number of households in the village.

Source : Ministry of Power


National Electricity Policy 2005

In compliance with section 3 of the Electricity Act 2003 the Central Government notified the National Electricity Policy.

The National Electricity Policy aims at laying guidelines for accelerated development of the power sector, providing supply of electricity to all areas and protecting interests of consumers and other stakeholders keeping in view availability of energy resources, technology available to exploit these resources, economics of generation using different resources, and energy security issues.

The National Electricity Policy was evolved in consultation with and taking into account views of the State Governments, Central Electricity Authority (CEA), Central Electricity Regulatory Commission (CERC) and other stakeholders.

The aims and objectives of the policy are as follows

  • Access to Electricity - Available for all households in next five years
  • Availability of Power - Demand to be fully met by 2012. Energy and peaking shortages to be overcome and adequate spinning reserve to be available.
  • Supply of Reliable and Quality Power of specified standards in an efficient manner and at reasonable rates. Per capita availability of electricity to be increased to over 1000 units by 2012.
  • Minimum lifeline consumption of 1 unit/household/day as a merit good by year 2012.
  • Financial Turnaround and Commercial Viability of Electricity Sector.
  • Protection of consumers’ interests.

National Rural Electrification Policy, 2006

The National Rural Electrification Policy was notified in compliance with Sections 4 & 5 of the Electricity Act, 2003 by the Central Government.

Relevant extracts of the National Rural Electrification Policy, 2006

  • Goals include provision of access to electricity to all households by the year 2009, quality and reliable power supply at reasonable rates, and minimum lifeline consumption of 1 unit/household/day as a merit good by year 2012.
  • For villages/habitations where grid connectivity would not be feasible or not cost effective, off-grid solutions based on stand-alone systems may be taken up for supply of electricity. Where these also are not feasible and if only alternative is to use isolated lighting technologies like solar photovoltaic, these may be adopted. However, such remote villages may not be designated as electrified.
  • State government should, within 6 months, prepare and notify a rural electrification plan which should map and detail the electrification delivery mechanism. The plan may be linked to and integrated with district development plans. The plan should also be intimated to the appropriate commission.
  • Gram panchayat shall issue the first certificate at the time of the village becoming eligible for declaration as electrified. Subsequently, the Gram Panchayat shall certify and confirm the electrified status of the village as on 31st March each year.
  • The state government should set up a committee at the district level within 3 months, under the chairmanship of chairperson of the Zilla Panchayat and with representations from district level agencies, consumer associations, and important stakeholders with adequate representation of women.
  • The district committee would coordinate and review the extension of electrification in the district and consumer satisfaction, etc.
  • Panchayat Raj institutions would have a supervisory / advisory role.
  • Institutional arrangements for backup services and technical support to systems based on non-conventional sources of energy will have to be created by the state government.

Source: Ministry of Power


Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY)

This scheme focuses on feeder separation (rural households & agricultural) and strengthening of sub-transmission & distribution infrastructure including metering at all levels in rural areas. This will help in providing round the clock power to rural households and adequate power to agricultural consumers. The earlier scheme for rural electrification viz. Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) has been subsumed in the new scheme as its rural electrification component.


The major components of the scheme are feeder separation; strengthening of sub-transmission and distribution network; Metering at all levels (input points, feeders and distribution transformers); Micro grid and off grid distribution network & Rural electrification- already sanctioned projects under RGGVY to be completed.

Budgetary Support:

The full scheme entails an investment of Rs 43,033 crore which includes the requirement of budgetary support of Rs. 33,453 crore from GOI over the entire implementation period. All Discoms including private Discoms and State Power Departments are eligible for financial assistance under this Scheme. Discoms will prioritize strengthening of rural infrastructure work considering specific network requirement and will formulate Detailed Project Reports (DPRs) of the projects for coverage under the Scheme. Rural Electrification Corporation (REC) is the Nodal Agency for operationalization of this Scheme. It will furnish monthly progress reports on the implementation of the scheme indicating both financial and physical progress to Ministry of Power and Central Electricity Authority. The Monitoring Committee under the Chairmanship of Secretary (Power) will approve the projects and also monitor implementation of the scheme.

Execution Period:

Projects under this Scheme will be completed within a period of 24 months from the date of issue of Letter of Awards by the utility.

Funding Mechanism:

Grant portion of the Scheme is 60% for other than special category States (up to 75% on achievement of prescribed milestones) and 85% for special category States (up to 90% on achievement of prescribed milestones). The milestones for the additional grant are: timely completion of the scheme, reduction in AT&C losses as per trajectory and upfront release of subsidy by State govt. All North Eastern States including Sikkim, Jammu & Kashmir, Himachal Pradesh and Uttrakhand are included in special category States.

Source : DDUGJY portal

Rajiv Gandhi Grameen Vidyutikaran Yojana

Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) was launched in April 2005 by merging all ongoing schemes. The Government is implementing Decentralised Distributed Generation (DDG) under Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) for electrification of villages where grid connectivity is either not feasible or not cost effective. In XII Plan period, DDG has also been extended to the grid connected area where supply of electricity is less than 6 hours a day. Decentralized Distributed Generation (DDG) can be from conventional or renewable sources such as Biomass, Biofuels, Biogas, Mini hydro, Solar etc.

Under the programme, 90% grant is provided by Govt. of India and 10% as loan by Rural Electrification Corporation (REC) to the State Governments. Rural Electrification Corporation (REC) is the nodal agency for the programme.

At present, Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) has been subsumed in the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) as its rural electrification component.


  • 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

Infrastructure under RGGVY

  • Rural Electricity Distribution Backbone (REDB) with 33/11 KV (or 66/11 KV) sub-station of adequate capacity in blocks where these do not exist.
  • Village Electrification Infrastructure (VEI) with provision of distribution transformer of appropriate capacity in villages/habitations.
  • Decentralized Distributed Generation (DDG) Systems based on conventional & non conventional energy sources where grid supply is not feasible or cost-effective.

Progress made under RGGVY

As many as 96% of un-electrified villages have been electrified across the country as on May 2014 and intensive electrification of 80% villages has been completed while free electricity connections have been provided to 77% BPL households under the programme RGGVY.

Based on evaluation studies conducted by various organisations in 20 states, the following have been the outcomes.

  • Most people reported that they have benefited from electricity connections since they are now able to use bulbs, fan, TV as well as mobile phones. In UP, a significant percent of those surveyed (43%) reported to have started using mobile phones after electrification since it became possible to charge the mobile sets. In Bihar, the most important use of electricity by the beneficiary households, as perceived by them, is for illumination (94.9%), followed by security (89.9%), communication through cellular phones (42.1%), accessing information and entertainment (52.1%) and comforts by running fans (18.4%).
  • In Madhya Pradesh, 85% of the villagers, in particular, women and children feel more secure and protected against wild animals, venomous reptiles and robbers due to electrified households and street lights.
  • 75% of women surveyed in Rajasthan stated that they are able to work in the fields after electricity reached their homes.
  • Students in all states reported to have benefited a great deal as after electrification under RGGVY, they are now able to study for longer hours and also save money & time which they had to spend on kerosene lamp. They also feel more comfortable during summer days due to the fans in the class. In Andhra Pradesh, 88% of beneficiaries reported positive impact on education. In UP, nearly 64% reported using electricity for education, 56% In Madhya Pradesh and 48 % In Bihar.
  • In J & K, most people feel that security & standard of life has increased after RGGVY implementation. Villagers are able to get the treatment in the night. In some of the villages, it was found that the villagers use electrical appliances for crop processing. Many shops were also found to be electrified in the villages through RGGVY line.

Remote Village Electrification Programme

The Ministry of New and Renewable Energy, Government of India is implementing this programme for providing financial support for electrification of those remote unelectrified census villages and unelectrified hamlets of electrified census villages where grid-extension is either not feasible or not cost effective and are not covered under DDUGJY. Such villages are provided basic facilities for electricity / lighting through various renewable energy sources. Small Hydro Power Generation systems, biomass gasification based electricity generation systems, solar photovoltaic power plants, etc., in distributed power generation mode may be used depending upon the availability of resources for generation of required electricity.

Source : MNRE

Village Energy Security Security programme


The objective of the project is to go beyond electrification by addressing the total energy requirements for cooking, electricity, and motive provide access to electricity through renewables to households in remote villages and hamlets, which are not likely to get covered through grid extension.

The projects on village energy security are taken up with a view to demonstrate the techo-economic parameters of the village energy security plan, provide operational experience, mobilize local communities and firm up the institutional arrangements.

Area of coverage

The projects would be undertaken in unelectrified remote villages and hamlets that are not likely to be electrified through conventional means.

Guidelines for implementation of the Projects

The projects would be undertaken by the Panchayats duly facilitated by implementing agencies such as DRDAs, forestry departments, NGOs, entrepreneurs, franchises, co-operatives, etc.

1. Guidelines for preparation of proposals for the projects

Identification of villages / hamlets

The village / hamlet identified should

  • Be remote, and may include a tribal or forest-fringe village / hamlet.
  • Have adequate availability of fallow, common or uncultivated non-grazing land for raising plantations
  • Have a cohesive and progressive social structure
  • Have a minimum of 25 and maximum of 200 households
  • Should be identified in consultation with forest, tribal and rural development departments / agencies.

2. Preparation of a preliminary proposal

After selection of the village / hamlet, a preliminary proposal would have to be prepared, got duly endorsed by the concerned State Nodal Agency and forwarded to the Ministry for consideration of `in principle’ approval.

Format for preparation of preliminary proposals for projects on creating Energy Security in villages through biomass

  1. Name & Full Address of the Implementing Agency (Forest Department / DRDA / NGO)
  2. Name & Full Address of State Nodal Deptt./Agency
  3. Name of Gram Panchayat, Block & District
  4. No. of Villages under Gram Panchayat
  5. Name of Village / hamlet selected for the Project
  6. Village census code
  7. Distance from nearest road-head
  8. Distance from the grid
  9. Total population of the village / hamlet
  10. Male / Female ratio
  11. Rate of literacy
  12. No. of households
  13. Number of Hamlets / Dalit Bastis in Village
  14. Type of Social Structure
  15. Community buildings – school, PHC, panchayat ghar, etc.
  16. Main occupation, indicating cash crops
  17. Biomass resource availability - type of biomass, local fuel wood / oil-seed bearing species, if any
  18. Availability of fallow land / waste land / uncultivated land etc. for energy plantations
  19. Availability of water
  20. Indicative Estimate of Energy Demand
    • Household – cooking, lighting, other
    • Community services, including streetlights
    • Irrigation/Agriculture Operations
    • Commercial
    • Industrial
  21. Existing pattern of energy / fuel use and average monthly expenditure per household
  22. Existing renewable energy devices in the village, if any
  23. Biomass Technology package proposed to be deployed
  24. Indicative capacity of the energy systems
  25. Role of local community in planning, implementation and management, including revenue management
  26. Details of any local NGO already associated with the village / hamlet
  27. Any other information

3.  Preparation of a Village Energy Plan

After receiving `in principle’ approval from the Ministry, a Village Energy Plan will have to be prepared, with active and full participation of the village community.

Assessment of the total energy demand

Energy demand include requirements for:-

  • Household cooking, lighting and entertainment
  • Community, commercial facilities such as shops, streetlights, health centre, school, flour mill, information and communication technology
  • Pumping water for drinking, irrigation
  • Rural / cottage industry

The minimum energy services to be provided for in any project should include cooking, lighting, street lights, pumping for drinking water supply, lights / fans in the school and primary health center.

Assessment of the biomass resources available locally

These may include dung, agro wastes, forestry residues, etc.

Plans for meeting the energy demand

  • The first option to be explored in the Village Energy Plan should be use of biomass resources.
  • Appropriate fast growing / oil seed bearing tree species should be identified
  • A plan be prepared for raising the plantations for obtaining wood, vegetable oil and other raw materials.
  • Until the plantations reach an age when annual increments of growth and other raw materials become available, biomass offset from use as cooking fuel and other locally available biomass should be utilized for energy production.
  • Only if biomass resources are not available or plantations cannot be raised, should utilization of other renewable resources such as mini hydel or solar be explored.
  • Based on the total energy requirements and the local resource availability, the energy production system would have to be configured. For an energy production system based on biomass, an appropriate technology mix should be selected from available biomass conversion technologies such as:-
  • Single / Bi-phasic biogas production using tree based organic substrates, vegetable wastes / residues, vegetable wastes / kitchen wastes, etc.
  • Biomass Gasifier coupled with 100% gas engines or duel fuel engines run on bio-fuels in lieu of diesel.
  • Stationary diesel engines run on straight vegetable oils or bio-diesel.
  • Electricity distribution should preferably be carried out through a local mini grid. Emphasis should be on energy to be provided for productive activities with thrust on micro enterprise development, backed by micro credit facilities, with a view to facilitating job creation, income generation, increasing the purchasing capacity and reducing the migration from villages.

4. Formation of a Village Energy Committee

Full participation of the village community should be secured from inception. The constitution of a Village Energy Committee should be through the Gram Sabha and got duly notified by the Gram Panchayat as a Sub-Committee or Standing Committee of the Gram Panchayat as per the relevant provisions of the State Panchayati Raj Act and rules in this regard. Care should be taken that the elected Panchayat member/s from that village are exofficio members of the VEC.

5. Creation of a Village Energy Fund

  • A Village Energy Fund should be got created under the provisions of State Panchayati Raj Act, initially with beneficiary contributions for sustained operation and management of the project.
  • Subsequent monthly / annual user charges would have to be deposited in this account.
  • Grants from other Government programmes such as rural development, forestry, tribal development, etc., if available, should be placed in this account, to be utilized towards operation and management of the project.
  • The Fund should be managed by the Village Energy Committee with two signatories nominated by the Committee. One of the signatories would be the Gram Panchayat member who is the ex-officio member on the Committee.
  • A separate capital account should also be got created, for receipts towards supply and installation of the energy production units. This Capital Account would also be operated by the VEC in accordance with the same procedure of joint signature and maintenance of accounts, which govern the Village Energy Fund.
  • Both the VEF and the Capital Account of the VEC, being the accounts of the Gram Panchayat under the provisions of the law, would be subject to the processes of accounts maintenance and audit that apply to the Gram Panchayat.
  • Expenditure of funds by the VEC should be disclosed to the Gram Panchayat at its monthly meeting as prescribed under the Panchayati Raj Act and Rules.
  • VEC, being a Sub-Committee of a Standing Committee of the Gram Panchayat would also be under obligation to disclose information in accordance with the Right to Information legislation.
  • VEC will also be authorized to submit the Utilisation Certificate to the Gram Panchayat, which in turn will submit the Utilisation Certificate to the agency concerned at the district level.
  • Technical facilitation and capacity building through implementing Agencies or Consultants such as NGOs would be focused at the VEC level through the Gram Panchayat.

6. Submission of proposals

An implementing agency would forward the proposals for the test projects to the Ministry through the State Nodal Agency. The proposals should include the following information:-

  • Census code number of the village
  • Village Energy Plan
  • Confirmation about setting up of Village Energy Committee and creation of Village Energy Fund
  • Plan for training
  • Implementation modalities
  • O&M arrangements
  • Commitment about balance 10% capital cost and funds for operation and management

7.  Project Implementation

  • The projects should be owned by the village community with the responsibility for overall operation / management resting with them.
  • However, if necessary the implementation agency may help them for about two years in this activity. During this period, the implementing agency would train local youth in the operation and management of the unit. After this period, the responsibility of operation / management should be undertaken by the Village Energy Committee.  The Village Energy Committee may hire / lease out these services to an entrepreneur as a preferred option.
  • The District Advisory Committees on Renewable Energy with the Collectors as the Chairman, Project Director, DRDA as Member-Secretary and comprising district-level functional heads and prominent citizens should be involved in the implementation of the test projects.
  • The concerned State Nodal Agency would have to closely monitor the implementation of the projects and provide monthly progress reports to the Ministry until commissioning. Thereafter, they should forward quarterly reports on performance and other feedback to the Ministry.
  • The Ministry would also carry out intensive monitoring and evaluation of the projects directly as also through independent agencies.

8.  Guidelines for Central Financial Assistance for the Projects

  • 90% of the capital cost of the projects would be met through central grant, subject to a benchmark of Rs.20,000/- per beneficiary household for meeting the total domestic and community energy requirements.
  • The balance 10% towards the capital cost would have to be mobilized by the community / implementing agency / State Nodal Agency.
  • Release of the Central Financial Assistance (CFA) towards the capital cost into the designated capital account of the Village Energy Committee would be made as per the following pattern:-
    • Initial release alongwith the sanction order                        - 50%
    • Second installment on receipt of equipment at site            - 25%
    • Final installment after successful commissioning              - 25%

as per contractual obligations and one month operation as per norms

CFA will also be provided towards the following associated costs:-

  • The operation, maintenance and management costs would have to be met through user charges for the energy services provided. However, if it becomes critical for the sustainability of the project, financial assistance towards operation, maintenance and management costs will be provided, subject to a maximum of 10% of the capital cost per project. Evidence of serious efforts made to recover user charges would have to be provided.
  • Professional charges @ 20% of the capital cost would be provided to the implementing agency for various services from concept to post commissioning, subject to a maximum of Rs.4.0 lakhs per village.
  • Service charges @10% of the capital cost, subject to a maximum of Rs. 2 lakh per village would be provided to the State Nodal Agency for monitoring and reporting of progress and feedback on performance.
  • Funds for awareness creation, training, seminars, workshops, etc. will be provided on merit on case by case basis.
  • Professional charges to the implementing agency will be released directly to implementing agency and, service charges to the State Nodal Agency after completion of the project. Release of CFA towards operation, maintenance and management cost would be made as per requirements.
  • Certificate of a project having been successfully implemented and made operational, as per the Sanction Order, shall have to be provided by the State Nodal Agency, after obtaining the same from the Village Energy Committee, before release of the final installment.
  • The Gram Panchayat or the Joint Forestry Management Committee, as the case may be, shall cause all accounts of the Village Energy Committee to be duly audited and sent along with the Utilization Certificate in the prescribed format to the State Nodal Agency for forwarded to the Ministry.

Source : MNRE

Sayali Apr 09, 2019 11:56 PM

How much percent of village households are electrified uptil now?

TARIQ AHMAD WAGAY Jan 18, 2019 09:06 PM

DDUJ scheme completes half of our village.we have line on trees .I am from Reshipora teh: Herman dist Shopian

Lutmon Nov 07, 2017 08:26 PM

Is it beneficial for the whole of Northeastern states? How does it work?

ravi Jun 27, 2017 10:54 AM

sir please give the name of un-electrified villages of uttrakhand .
if possible mail the list on *******@gmail.com

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