As many as 50.4 lakh BPL households were provided free electricity connections in FY18 under various government schemes, power minister RK Singh informed the Rajya Sabha on Tuesday. Uttar Pradesh, Bihar and Madhya Pradesh were the largest beneficiaries on this account, receiving 12.9 lakh, 10.5 lakh and 8.5 lakh such connections, respectively. This is the second largest instance of free BPL power connection dispensed in the last ten years, trailing behind the 58.8 lakh released in FY11. Cumulatively, 3.1 crore BPL households have been provided free power connections till June 2018.
To make sure that the power distribution companies (discoms) do not suffer from under-recovery due to higher supply to low revenue generating BPL consumers, the government plans to shift completely to pre-paid meters. Though the connections to BPL families are free, the Central government would not provide any financial assistance to BPL households for electricity bills.
Though the states can offer tariff and billing subsidies, but if the power ministry’s amendment proposals to the National Tariff Policy are approved, the subsidies are to be disbursed solely through the direct benefit transfer (DBT) mechanism. To further safeguard the discoms, the ministry has also proposed that electricity regulators should not take into account the subsidy component disbursed by the states while calculating tariffs.
The government had launched the Saubhagya scheme in September, 2017 with the aim to connect all unelectrified households by the end of FY19, under which households above the poverty line would have to pay Rs 500 in 10 instalments for power connection.
However, it continued to provide free connections to BPL households as per the conditions of the Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY)—the current government’s scheme for rural electrification. The DDUGJY programme had subsumed features such as electricity access to villages and households along with free connection to BPL families of the previous Rajiv Gandhi Grameen Vidyutikaran Yojana.