Rural India to get a taste of Gujarat model of power reforms

The Centre’s mega plan for the power transmission sector could start from Rajasthan and Andhra Pradesh, with public sector Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) incubating the programme.

The Union government’s Deendayal Upadhyaya Gramjyoti Yojana, the first and largest replica of Gujarat's model of power reforms, will be executed through a special purpose vehicle with equity participation from PFC, REC and state governments. Along with the separation of transmission feeder lines, there will also be an emphasis on distribution reforms

Taking a cue out of Gujarat’s Jyotigram Yojana for rural electrification, finance minister Arun Jaitley announced a similar scheme for the nation, to augment the supply of power to rural areas and allocated Rs 500 crore for it in the Union Budget last week.

POWER PLAN

• Deendayal Upadhyaya Gramjyoti Yojana to be a replica of Jyotigram Yojana of Gujarat
• Feeder separation for rural areas, wherein domestic and agricultural load is segregated
• Fixed duration power for agriculture use, and continuous supply for domestic users
• To be rolled out in Rajasthan and Andhra Pradesh
• REC & PFC to form a special purpose vehicle with state electricity boards
• Budget outlay of Rs  2,500 crore
• Budget allocation of Rs  500 crore
• Integrated Power Development Scheme: Sub-transmission and distribution reforms along with 100% metering a cross the country

With a Budget outlay of Rs 2,500 crore, the scheme would be merged with ‘Integrated Power Development Scheme’, which aims at improving India’s sub-transmission and distribution network.

“The programme is inspired from the feeder separation scheme of Gujarat for the rural population. We would start with Rajasthan and Andhra Pradesh,” said a senior official at the ministry of power.

He said that the central government would infuse initial equity; the rest would come from the states, which would come on board to restructure their transmission infrastructure.

Jyotigram Yojana was introduced in Narendra Modi-ruled Gujarat in 2003-04 and has till now, covered 18,000 villages. The scheme involved physically segregating rural feeders for supply to households and rural commercial usage respectively.

Piyush Goyal, minister for coal, power and renewable energy during his visit to Gujarat last month, had expressed the intention to emulate the state’s programmes for improving power transmission in the country. He also expressed interest in replicating the Jyotigram Yojana for rural electrification in India.

An official at the REC, requesting anonymity, said that their organisation was asked to design a nation-wide programme on the same lines as Jyotigram, as soon as the new government came to power.

Apart from the large scale execution, the other major challenges that the scheme could face would be resistance from state electricity boards which are financially distressed and varied consumption bands in the states, said a power ministry official.

“It would be difficult to get all states on one table at once; so we will go step by step, educating the states about the benefits of this programme. The rural customer profile is different in every state and also the approach of their respective government,” said the official.

The reason cited by power sector experts for the feeder separation scheme working in Gujarat was the cash-rich status of its power distribution companies which could invest in infrastructure like this. The total investment entailed in Jyotigram Yojana was Rs 1,290 crore. The per capita consumption of electricity in Gujarat at 1,354 units is higher than the national average.