Deen Dayal Upadhyaya Gram Jyoti Yojana Creating Efficiency in Electricity Distribution

Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) Ministry of Power Deen Dayal Upadhyaya Gram Jyoti Yojana Creating Efficiency in Electricity Distribution Key Features of DDUGJY The DDUGJY is a flagship scheme of the Ministry of Power. It seeks to achieve rural electrification by providing electricity to all households as well as institutionalizing feeder separation at the national level. The scheme has been launched with an outlay of INR 43,033 crore for the period between 2015 and 2022 and the Rural Electrification Corporation (REC) is the nodal agency for the implementation of the scheme. As of April 2015, there were 18,452 un-electrified villages. A total of 11,271 villages have been electrified by 15 th December 2016. India has made substantial progress in achieving rural electrification over the past two decades with 96.7 percent of villages electrified, as of Jan 31 st, 2014. However, the progress of household level electrification is still unsatisfactory with almost 45 percent of rural households not having access to electricity, as per Census 2011. Moreover, while the power supply for agriculture is subsidized, this subsidy is not efficiently managed or monitored. Subsidized power is utilized for both agriculture and non- agriculture purposes, which defeats the purpose of subsidized power and leads to power outages for more than 6-8 hour in a day in some states. Other problems, which plague the power sector, are the high technical losses (estimated at 35 percent), and power theft. In light of this context, the Government of India (GoI) has launched the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), a scheme which seeks to promote feeder separation in rural areas, as has been implemented in certain states such as Gujarat and Rajasthan and also achieve the objective of rural electrification, as envisaged under the erstwhile Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY). The ultimate objective is to improve both the quality and the availability of power supply across rural areas of the country. This brief seeks to provide an overview of the scheme, including the scope of work, the implementation process and the current status with regards to village electrification.

DDUGJY 2 Rural Electrification From RGGVY to DDUGJY The importance of rural electrification in the Indian context can t be overstated. Approximately 40 percent of rural households are dependent on agriculture as their main source of income; the rural countryside is dependent on electricity for running irrigation pump sets and increasing agricultural production. Today, improving electricity supply is seen as a policy design aimed at spurring socio- economic development in the rural areas. However, despite the fact that the GoI has launched several schemes such as the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) and the Remote Village Electrification programme to provide electricity in the rural areas, most rural households lack access to reliable electricity. Erratic power supply in the form of long outages and low voltage are a norm rather than an exception in the villages of densely populated states such as Uttar Pradesh and Bihar. As per the data available on the GARV dashboard of the Ministry of Power (MoP), approximately 3 percent of these villages i.e. a total of 18,452 villages were identified as unelectrified villages as on 31.03.2015. Four states Odisha, Bihar, Assam and Jharkhand account for 63 percent of the unelectrified (UE) villages. However, these numbers do not convey the complete picture as the definition of an electrified village (under the Rural Electrification Policy of 2006) only includes the following factors: a) Basic infrastructure such as Distribution Transformer and Distribution Lines are provided in the inhabited locality as well as a minimum of one Dalit Basti/hamlet where it exists b) Electricity is provided to public places like Schools, Panchayat Office, Health Centres, Dispensaries, Community Centres, etc. and c) The number of electrified household stands at 10% of the total number of households in the village. Now, let us compare the village electrification data to the number of rural households using electricity as the primary source of energy for lighting. According to the NSSO 68th Round report titled Energy Sources of Indian Households for Cooking and Lighting, 2011-12, 72.7 percent of rural households use electricity as the primary source of lighting. This implies that approximately 27 percent of rural households are dependent on other sources of energy for lighting purposes. More importantly, across the four states accounting for the majority of UE villages, the level of HH access to electricity is also very low, with electrified HH ranging from 25.8 percent in Bihar to 62.2 percent in Jharkhand. This implies the enormity of the task at hand i.e. the country has to achieve universal rural electrification by providing electricity to all rural households and also ensure reliable supply for agricultural consumption, which accounts for approximately 22 percent of the total power consumption in the country (as per the data available from Power Finance Corporation). Therefore, the revamped Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) seeks to not only ensure electrification of all UE villages in mission mode but also focuses majorly on the feeder separation for rural domestic and agricultural consumers to provide better and more reliable power supply.

DDUGJY 3 Scope of Work under DDUGJY Going beyond Village Electrification While village electrification is definitely one of the core components, the DDUGJY focuses on separation of power supply feeders for agricultural and non- agricultural feeders, creation and augmentation of power supply infrastructure for better transmission and distribution of power, which includes metering of electricity distribution for improved energy auditing. The scope of work under DDUGJY is presented below: Feeder Separation Systems Strengthening Rural Electrification Regrouping of consumers into agricultural and nonagricultural users Creation of high tension lines for setting up new feeders (both agricultural and non- agricultural) Installation of new transformers for distribution of electricity to agricultural and nonagricultural end users Creation of new substations and augmentation of the capacity of existing stations to enhance electricity distribution Modernization of existing sub-stations & power lines to improve quality of electricity distribution Installation of aerial bunch cable to prevent electricity theft RGGVY has been subsumed under the scheme to spread rural electrification. BPL households are eligible to get free electricity connection under the scheme. Villages, which cannot be part of grid connectivity, are provided electricity through off-grid solutions. Figure 1: Scope of work under DDUGJY Feeder Separation: The subsidized nature of power supply to agriculture sector leads to usage of subsidized power for rural non- agricultural purposes. This leads to wastage of resources and divergence of subsidies from the target beneficiary group. In order to combat this trend, the states of Andhra Pradesh, Gujarat, Haryana, Punjab, Karnataka, Maharashtra, Madhya Pradesh and Rajasthan had introduced feeder separation, so as to differentiate between power supply for agriculture purposes and non agriculture purposes. This has benefitted consumers especially in Gujarat and Rajasthan where the

DDUGJY 4 power outages have reduced by almost half the original amount. 1 Following the successful example of these States, feeder separation has been instituted as a Central Government policy through DDUGJY. It would be carried out physically and virtually, which would entail re- orientation/re- alignment of existing lines and installation of rotary switch to hardware installation in sub- stations respectively. Feeder segregation is expected to have a significant impact on power usage in agriculture intensive states like Bihar, Uttar Pradesh and Haryana. System Strengthening: The scheme also aims to augment the distribution network by creation of new sub stations with the capacity of 66 KV/33 KV/22 KV/11 KV. Augmentation of infrastructure would also include erection of new transformers and strengthening of the present electricity distribution network. Old/non- functioning sub stations are to be replaced by new systems to modernize the infrastructure. System strengthening would also imply greater emphasis on metering in order to track consumption patterns of regions. This would allow state power departments/private discoms to delineate areas of high power losses, and suggest measures to improve the situation based on accurate information. Rural Electrification: Under RGGVY and subsequently under DDUGJY, all BPL households are provided with free electricity connections along with LED lamps at the rate of Rs. 3000 per connection. Habitations with population greater than 100 are also eligible for electricity coverage under the same provision. Free connections are also being provided to BPL households in villages which have been covered under the Xth and XIth plan. There is a special record made of the SC/ST BPL families, who receive free connection in order to track the progress of electricity supply to the marginalized sections of the society. Decentralized Distribution- cum- Generation (DDG): Villages, which cannot be a part of grid connectivity due to economic or geographical reasons are provided electricity through Decentralized Distribution- cum- generation. A DDG can be created through the use of biomass, biofuels, biogas, solar energy amongst other renewable energy options. These systems can also be utilized to support the power infrastructure in villages where electricity is provided for less than six hours a day. As per the latest information, 4,604 DDG projects have been established. Around 2,224 of these projects run as standalone systems and the rest operate in the manner of a micro/mini grid especially in the states of Andhra Pradesh, Chhattisgarh, Madhya Pradesh, Kerala, Uttar Pradesh and Uttarakhand. 2 District Electricity Committee: A District Electricity Committee has been formed at the district level vide a Ministry of Power notification D.O.No.41/1/2015- RE, to track the progress of schemes administered by themop, namely DDUGJY and Integrated Power Development Scheme (IPDS). 3 The committee would be headed by the senior most Member of Parliament of the region along with other MPs, Sarpanch of 1 http://www.worldbank.org/en/news/press- release/2013/10/01/lighting- rural- india- is- feeder- segregation- the- only- answer 2 Lok Sabha Unstarred Question No. 336, 17/11/2016 3 IPDS: A Central Government scheme, which aims at feeder separation, strengthening infrastructure and metering for the urban areas.

DDUGJY 5 Panchayats as well as the representatives of the concerned Central Public Sector Undertaking (CPSU) in the power and coal sectors. The District Collector (DC) is to be the convener of this Committee with the Senior Engineer of the concerned Discom appointed as the Member Secretary. The Committee is to meet once in three months with the overall mandate of overlooking the quality of power supply as well as consumer satisfaction for the region. The meeting is to be called by the Member Secretary and the quarterly reports are to be sent to the nodal agency for the implementation of rural electrification under DDUGJY i.e. REC. Village Electrification as compared to HH Electrification 4 As mentioned above, the definition of village electrification is extremely narrow. Village Electrification is calculated on a sample cumulative basis and not an individual household basis, which leads to a wide discrepancy between village electrification and HH electrification as evident from the data below. 120 100 80 60 40 20 0 Andhra Pradesh Arunachal Pradesh Assam Bihar Jharkhand Nagaland Odisha Uttar Pradesh Madhya Pradesh Chhattisgarh Goa Gujarat Haryana Himachal Pradesh Jammu & Kashmir Karnataka Kerala Maharashtra Manipur Meghalaya Mizoram Punjab Rajasthan Sikkim Tamil Nadu Tripura Telangana UttaraKhand West Bengal % of Villages electrified % of Rural HH electrified As evident from the data presented above, the level of village and HH electrification are different in most states. Only the states of Gujarat, Goa, Punjab and Andhra Pradesh perform equally well in both the fields of village and HH electrification. In all other states there is a visible discrepancy between village and HH level electrification. The worst performers are the states of Assam, Bihar, Jharkhand, Nagaland, Odisha and Uttar Pradesh. The data for all these states presents village electrification at 96 percent and above, however, all of 4 GARV dashboard

DDUGJY 6 them perform dismally in terms of rural HH level electrification. Jharkhand and Bihar are the worst performers country wide, with rural HH level electrification standing at only 39 percent and 45 percent respectively. The village electrification level of all states like Odisha, Uttar Pradesh and Madhya Pradesh stand at 97.9 percent, 99.9 percent and 99.8 percent, however the HH level progress lags behind significantly at 55 percent, 47 percent and 49 percent respectively. Overall rural electrification as per household level stands at 76.80 percent, which requires energized efforts towards spreading rural electrification. Implementation Model of DDUGJY The scheme involves a diverse range of stakeholders ranging from power utilities, the state government and central level nodal agencies. The nodal agency for the implementation of the scheme is the Rural Electrification Corporation (REC). A Monitoring Committee, chaired by the Secretary, Ministry of Power has been set up at the national level and it is responsible for granting approval to projects as well as monitoring the implementation of the various projects taken up under the DDUGJY. Monitoring Commiittee Composed of Secretary, MoP, REC and other departments Responsible for policy direction, sanctioning projects and monitoring Rural Electrification Corporation (REC) Nodal agency for implementation of the scheme under guidance of MoP; issues guidelines for the projects Conduct quality check for the works State Level Standing Committe (SLSC) Constituted under RGGVY Recommendation of Detailed Project Report (DPR) to the Monitoring committee Power Utilities Both private and public discom companies are included in Power Utilities Preparation of DPR for implementation of projects and submission to REC Establishment of dedicated project implementation cell at the district level Figure II: Implementation model of DDUGJY The chain of policy direction flows from the Monitoring Committee at the Central level to the Rural Electrification Corporation (REC), which notifies the guidelines. The REC carries out an appraisal of the Detailed Project Report (DPR) submitted by the power utilities (both public and private) and forwards them to the Monitoring Committee for approval.

DDUGJY 7 Human Resource to monitor the progress of Village Electrification Gram Vidyut Abhiyanta (GVA) In order to accurately monitor the spread of village electricity, a Gram Vidyut Abhiyanta (GVA) and District Vidyut Abhiyanta (DVA) would be deployed at each block and district respectively (for unelectrified regions). The GVAs would be the on-ground monitoring agency of the REC. They would overlook the implementation of the electrification process on the ground and upload the updated information on the RE mobile application, an app which provides real time data about the progress of electrification of these villages. The officer would also monitor the timelines for completion of the projects as well as their quality. Each GVA would make a field visit to five unelectrified villages in the assigned block per week. In the village s/he would have to meet the Sarpanch of the village and other inhabitants of the region in order to assess the development of the project. A weekly meeting would also be held with the DVA to update her/him about the progress. As of 31.12.2016,, there are 437 GVAs functioning in the field. Processes to be followed under DDUGJY Implementation under the scheme involves several processes from preparation of proposals, sanctioning of grants, to awarding contracts for implementation. Stakeholders ranging from power utilities to central and state level agencies have a major role to play in the process. Given below is an overview of the steps to be undertaken for implementation of the scheme. Creation of DPR by Power Utility Recommendation of DPR by SLCC to REC Approval of Project Cost by the Monitoring Committee Submission of DPRs to Monitoring Committee Tripartite Agreement between REC, State Government and Power Utility Award of Turn-key to the Utilities Submission of DPR to REC Appraisal of the project by REC Funding under the scheme The scheme is to be primarily driven by the support of GoI through grants at different stages. The State governments have to play the role of facilitators by ensuring coordination between different agencies and providing necessary inputs such as land and statutory clearances. While the GoI provides 60 percent of the project cost as a grant, the remaining 40 percent has to be arranged by the power utilities. The minimum contribution of the power utility has to be 10 percent, for which the concerned State can make their own contribution. Utilities can also take a loan to provide for their contribution. The GoI reimburses half of the loan component on achievement of pre- determined milestones. For special

DDUGJY 8 category states 5, the Central contribution increases to up to 85 percent and the mandatory contribution by the power utility decreases to 5 percent. The scheme can play a major role in rural development in India. Previous experiences of state governments will have to be kept in mind while implementing the scheme at a national level. Focus has to be on effectively monitoring the initiatives being taken under the scheme. There is need to assess impact at regular intervals and incorporate the learning from one stage into strategies for another. Overall, proper coordination between a diverse range of stakeholders would be the key factor to ensure proper implementation of the scheme and achievement of the intended objectives. Annexure I State wise number of unelectrified villages (12/10/2015) and their progress 6 State Number of UE Villages To be electrified through To be electrified through offgrid (yet to be sanctioned) grid (already sanctioned) Odisha 3449 3238 211 Assam 2869 1735 1134 Bihar 1292 907 Jharkhand 2487 1418 455 Arunachal Pradesh 1578 1454 124 Uttar Pradesh 1189 1189 Meghalaya 911 894 17 Chattisgarh 1048 505 161 Rajasthan 471 336 Madhya Pradesh 359 211 148 Manipur 252 252 J&K 106 106 Nagaland 82 82 13 Uttarakhand 76 56 Mizoram 42 42 9 Karnataka 39 30 Himachal Pradesh 35 35 Tripura 26 26 West Bengal 14 14 5 All 8 north- eastern states and 3 Himalayan States of Jammu & Kashmir, Himachal Pradesh and Uttarakhand 6 http://www.ddugjy.gov.in/mis/portal/re- APP/pdf/GVABookOctober- 2015.pdf