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Saubhagya scheme of PM - A distant dream

October 12, 2017 04:17 PM

By Vinod Kumar Gupta
The Prime Minister launched “Saubhagya” scheme   on September 25  to provide electricity  to every  household in the country  by the end of 2018 at a cost of Rs 16000 crore.  

India is a power surplus country and 95  % villages are deemed electrified yet  there is no power supply in 4,0530,031 houses in the country and to complete the job by December 31 2018 ,  new power connections to 88687  houses will have to be released daily for the next 15 months from October to December 2018, a herculean  task .

According to the official data Uttar Pradesh and Bihar constitutes 25 % of total unelectrfied houses. The number of households without power connections in various states are Uttar Pardesh  1,46,66,815 , Bihar  64,95,622 ,Jharkhand  30,47,833 , Madhya Pardesh  45,02,027 , Rajasthan 20,20,979, Haryana 6,83,690 ,Chhatisgarh  6,44,458 and Gujarat  23,059.

As per “Saubhagya" scheme the government will give the connection to the four crore families which do not have electricity and no money will be charged from the poor for electricity connection. It may be mentioned that BPL households already receive a free electricity connection under the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) launched by UPA government in April  2005 It seems  that rebranding  has been done to an already repackaged Scheme.

“Saubhagya “envisages that the consumer would pay for the power consumption as power supplied will not be free. However the power can be provided by the state government at a subsidized tariff depending upon its resources. For most social schemes the government had been able in creating structures in the first instance but subsequently loses the direction.

 As per rural electrification policy of government, a village is deemed “electrified” if basic infrastructure such as distribution transformer and distribution lines have been set up in the inhabited locality, including a “Dalit basti” and at least 10 per cent of the households of such a village have access to electricity.

In India, rural electrification began in 2005 with the launch of the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) and was followed up with the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY). Government claims on DDUGJY indicate 13-24 hours of supply to rural areas, but the independent monitoring of quality of supply at consumer locations by Prayas Energy Group tell a different story.

Merely giving electricity connections to all the households will not suffice unless power is made available to rural consumers at an affordable price, failing which people will surrender their connections later.  It may be mentioned that as per governments claim that  99.5 per cent of our villages are deemed electrified, a fifth of the country’s population still awaits an electricity connection and many more suffer due to poor power supply.

The provision of an electricity connection to every household does not guarantee electricity access. In most of the villages from Uttar Pradesh, Bihar, Jharkhand, West Bengal, Madhya Pradesh, and Odisha where more than two-thirds of the households had electricity connections, less than 40 per cent had meaningful access to electricity. Many rural consumers were displeased with the poor power supply and cited reliability, quality, duration, and affordability as key concerns, as per survey.

In a country with surplus generation capacity the financial constraints of power distribution companies do not allow them to purchase power despite the power demand in the state. The most important cause of the problems being faced in the power sector is the irrational and unremunerative tariff structure at the directions of state governments and the state do not fully compensate the Discoms for low tariff.

India's per capita electricity consumption remains a fraction of major economies. Average transmission and distribution losses stand at 23 per cent. The power theft is a major problem in almost all the states. Free power to agriculture sector though even given for restricted hours consumes more than the sanctioned load of the tube well. Unmetered connections with flat fees provide no incentive for households to be judicious about energy consumption, discouraging distribution companies to supply reliable power.

With the coming up of generation plants in private sector and their signing long term power purchase agreements with Discoms granting payment of fixed charges in case power is refused by Discoms has led to closure of most of thermal units in state sector. The plant load factor of thermal units in state sector has declined consistently in last few years from 77.5% in 2009-10 to 59.88 % in 2016-17.

Project proposals shall be prepared by state distribution companies and sanctioned by an inter-ministerial monitoring committee headed by secretary. The electrification works under the sanctioned projects shall be executed by Discoms through turnkey contractors.

The Government cannot execute the scheme if it depends only on private sector. The private sector is not to do social service but to earn profits. It has to rope in all the state Discoms which may not be very enthusiastic to venture into the not-so-profit making areas. The major challenge will be the implementation of scheme at the local level for enrolling new consumers.

The success of ambitious plan to electrify all households in India by December 2018 faces major hurdle UP and Bihar. If adequate, affordable quality supply is not provided to these consumers , there is a danger of the investment going waste, as they may be forced to opt out for non- payment of bills . The government should improve the working of Discoms to make success of any scheme.

The key to success of t the scheme is the political will to allow for commercial operations of Discoms otherwise to supply power to every household will remain a distant dream.

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