Since its launch in September, 2017, 2.62 crore households have been provided with power connections, with only 18,734 remaining to be covered in the country
Lauded by the International Energy Agency (IEA) as one of the greatest successes in the history of electrification, the Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya scheme) has raised the bar on implementation of government programmes, almost managing to meet its target of providing power to all unconnected households by March 31, 2019. Since its launch in September, 2017,
2.62 crore households have been provided with power connections, with only 18,734 households in extremism-affected Chhattisgarh remaining to be covered under the scheme.
With a total outlay of Rs 16,320 crore including budgetary support of Rs 12,320 crore, the Saubhagya scheme mandated all willing households in rural areas and poor households in urban areas being given free electricity connections. Unelectrified households which fell outside the stipulated segments were given connections on payment of Rs 500. In remote and inaccessible places where grid extension was not feasible or cost-effective, solar-based standalone systems have been provided.
Saubhagya’s launch was seen as an extension of government policy that had targetted electrifying all villages. The power ministry had reported the electrification of all of India’s 5,97,464 inhabited villages in April, 2018 — there were 18,452 unelectrified villages in India when the Narendra Modi government took over in May, 2014.
To enthuse discoms, Power Minister
RK Singh announced rewards of Rs 100 crore for entities which met the Saubhagya targets first. The power ministry also partnered with the ministry of skill development and entrepreneurship to train manpower in six states. Around 47,000 people have been trained as distribution linemen and 8,500 as technical helpers for the purpose.
Of its impact, Somesh Kumar, partner and national leader, power and utilities,
EY India says, “the scheme has the potential to provide a much-needed thrust to the rural economy, given that power is one of the most essential ingredients of economic growth.” The growth in power demand is also expected to help power plants that are without power purchase agreements. As per preliminary estimates, with an average load of 1 KW per household and average use for eight hours a day, an additional 28,000 MW would be needed every year to meet the demand created under Saubhagya.
At the same time, the scheme has introduced a new set of challenges, especially for the cash-strapped discoms. Care Ratings has highlighted that major Saubhagya states have aggregate technical and commercial (AT&C) losses —an indicator of power pilferage — of over 25%. Uttar Pradesh (31.24%), Bihar (36.3%), Jharkhand (34.6%) and Chhattisgarh (29.9%), laggards on AT&C losses, account for about 52% of the total households connected under Saubhagya — AT&C loss of one percentage point translates into under-recovery of about Rs 4,000 crore on a pan-India basis. Bringing down AT&C losses would thus be key to stabilising the power sector in India and would require an improvement in revenue collection, especially from consumers added under Saubhagya, the agency has said.
Another challenge is the failure of the agencies to ensure that all new connections are metered, as is mandated. A survey titled ‘Access to Clean Cooking Energy and Electricity’ by the Council on Energy, Environment and Water (CEEW) in November, 2018 called for greater billing and collection efficiency, highlighting that about a third of Saubhagya households had not received a bill in the past one year or since they got connected to the grid.