RBI, Nabard to help light up rural India

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The government, to encourage investment and fund flow in rural electrification, proposes to evolve model schemes in consultation with the Reserve Bank of India (RBI) and the National Bank for Agriculture and Rural Development (Nabard).

These schemes and related facilitative norms, guidelines and limits for eligible capital costs are intended to promote participation by the lending community in rural electrification.

The Centre, in its Rural Electrification Policy released last week, also proposes to encourage use of IT for electricity supply in rural areas through both on-grid and off-grid measures in order to increase efficiency and cut costs.

Special efforts for widespread use of IT will be made and a suitable mass media communication programme will be evolved to encourage community management of local power distribution.

The policy envisages that rural electrification projects seeking financial support demonstrate the arrangements proposed for regular maintenance and upgradation support.

The policy says realising from past experience that higher capital subsidy is necessary for successful implementation of rural electrification programmes.If the government/ state electricity regulatory commission decides to permit a licensee to use assets using subsidy, it must be ensured that the capital subsidy benefit is passed on to the consumers.