Rural power plan not viable, says Plan panel

The Planning Commission has faulted the ambitious Rs 16,000 crore Rajiv Gandhi Grameen Vidyutikaran Yojana as being economically unviable and expressed its concerns to the power ministry.

Stating that the scheme does not meet the objectives of the National Common Minimum Programme, the Plan panel has highlighted several critical issues pertaining to the scheme.

"We are concerned about the progress of the scheme," a top planning commission official told Business Standard.

Pointing out that the revenue model for the scheme is not sustainable, the Plan panel said there was a disconnect between the power ministry's own objectives and the Plan target.

"The ministry's programme in its current form will create two classes of users. This is unsustainable," officials added.

The scheme has not witnessed the desired amount of progress as was earmarked for 2005-06. Out of 10,846 villages scheduled to be covered in 2005-06, only 1,941 villages have been covered so far.

The Plan panel has also observed that the scheme does not have stakeholders participation, a strong local institutional framework and lacks bundling of rural services like electricity, water and health, nutrition, education, telecom and housing, along with increasing non-pumping productive loads as a component of rural electrification as parameters of success.

These parameters have been incorporated internationally for a successful regional electrification programme. Even the National Advisory Council had raised doubts about the scheme's workability.

The plan targets for 2005-06 under the yojana aim at electrification of 60 lakh households, including 17.88 lakh below poverty line (BPL) households.

However, the power ministry's targets only 10,846 villages for the corresponding period.

The scheme is being implemented through Rural Electrification Corporation where the central government provides for 90 per cent of the capital cost of the programme.

The scheme launched in April 2005 aims to provide electricity access to 7.8 crore rural households in five years and electrify all 2.34 crore BPL households. Out of the Rs 5,000 crore sanctioned by the Cabinet for the scheme, Rs 1,100 crore was allocated for 2005-06 and Rs 3,200 crore for 2006-07.