Unlike the earlier scheme, which provided for a 60 per cent grant, the new scheme proposes to provide 90 per cent capital subsidy for creation of rural electricity distribution backbone (REDB) and village electrification infrastructure.
Therefore, from Rs 16,000 crore funds outlay, around Rs 14,400 crore will come by way of Budgetary support. The scheme will be monitored by the ministry of power along with Planning Commission and ministry of finance.
The features of the erstwhile Kuti Jyoti Programme, for free single point connection for households below poverty line with 100 per cent funding, would also be suitably integrated with the new scheme. Moreover, the new scheme will also integrate the provision of additional centre assistance (ACA) to states by way of loan for rural electrification under minimum needs programme in the 10th Plan, with annual provision of Rs 600 crore. However, the Pradhan Mantri Gramodaya Yojana will continue and will not be integrated with this new scheme. This is because there is no earmarked component of rural electrification in the PMGY scheme.
The new scheme envisages creation of a REDB with 33/11 kv substations; creation of VEI with atleast one distribution transformer; rural household electrification (RHE) to provide access to electricity for all uncovered rural households (approx 7.8 crore); and de-centralised distributed generation for such villages where grid connectivity is either not feasible or not cost effective.
On the financing front, out of Rs 16,000 crore, around Rs 1,000 crore has been earmarked for the first year, Rs 3,000 crore each for the second and third year followed by Rs 4,500 crore each during the forth and the fifth year.
Officials said that a budgetary support of Rs 6,300 crore would be required for this scheme during the first three years or the remaining part of the 10th Plan. For this, it is proposed to use Rs 3,000 crore, available in the existing allocation of 10th Five Year Plan for giving budgetary support to NTPC, as the latter due to better internal resource generation is not in need of the same.
Around Rs 2,600 crore would be available from the existing provisions of :the minimum needs programme, which will give Rs 1,800 crore; the Kutir Jyoti programme, which will give Rs 300 crore; and the accelerated rural electrification programme, which will give Rs 500 crore. All these three programmes will be me-rged under the new scheme.