SALIENT FEATURES

    1. THE SCHEME

         Scheme is for the attainment of the goal set for providing access to electricity to all households in five years.

       Ninety per cent capital subsidy is provided for overall cost of the projects under the scheme.

       States must make adequate arrangements for supply of electricity and there should be no discrimination in the hours of
           supply between rural and urban households.  

       For projects to be eligible for capital subsidy under the scheme, prior commitment of the States has been obtained
           before sanction of projects under the scheme for : -

          deployment of franchisees for the management of rural distribution in projects financed under the scheme, and
          the provision of requisite revenue subsidies to the State Utilities as required under the Electricity Act, 2003.

        The scheme is being implemented through the Rural Electrification Corporation (REC).

    2. SCOPE

         Under the scheme, projects could be financed with capital subsidy for provision of : –

       Rural Electricity Distribution Backbone (REDB)

          Provision of 33/11 KV (or 66/11 KV) sub-stations of adequate capacity and lines in blocks where these do not exist.

      Creation of Village Electrification Infrastructure (VEI)

          Electrification of un-electrified villages.
          Electrification of un-electrified habitations.
          Provision of distribution transformers of appropriate capacity in electrified villages / habitation(s).

       Decentralised Distributed Generation (DDG) and Supply

          Decentralised generation-cum-distribution from conventional sources for villages where grid connectivity is either not
             feasible or not cost effective
          Remote villages covered for financing under MNES not included

      REDB, VEI and DDG would indirectly facilitate power to the requirement of agriculture and other activities including

          irrigation pumpsets
          small and medium industries
          khadi and village industries
          cold chains
          healthcare
          education and IT

         This would facilitate overall rural development, employment generation and poverty alleviation.

       Rural Household Electrification of Below Poverty Line Households :

          Electrification of un-electrified Below Poverty Line (BPL) households are financed with 100% capital subsidy as per
             norms of Kutir Jyoti Programme in all rural habitations. 
          Households above poverty line are to pay for their connections at prescribed connection charges and no subsidy would
             be available for this purpose.

       The scheme covers the entire country

    3. FRANCHISEES

       Management of rural distribution through franchisees, who could be Non-Governmental Organisations (NGOs), Users
           Association, Cooperatives or individual entrepreneurs. 

       The Panchayat institutions would be associated. 

       The franchisees arrangement may be for system beyond and including feeders from substation or from and including
           Distribution Transformer(s).

    4. REVENUE SUSTAINABILITY

       Based on the consumer mix and the prevailing consumer tariff and likely load, the Bulk Supply Tariff (BST) for the
           franchisee would be determined after ensuring commercial viability of the franchisee.

       This Bulk Supply Tariff would be fully factored into the submissions of the State Utilities to the State Electricity Regulatory
           Commissions (SERCs) for their revenue requirements and tariff determination.

       The State Government under the Electricity Act is required to provide the requisite revenue subsidies to the State Utilities if
           it would like tariff for any category of consumers to be lower than that of the tariff determined by the SERC.

      While administering the scheme, prior commitments may be taken from the State Government regarding –

          Determination of bulk supply tariff for franchisees in a manner that ensures their commercial viability.
          Provision of requisite revenue subsidy by the State Government to the State Utilities as required under the Electricity Act.

    5. RELEASE OF CAPITAL SUBSIDY

       The capital subsidy for eligible projects under the scheme is being given through REC and projects shall be implemented
           fulfilling the conditionality

       In the event projects are not implemented satisfactorily in accordance with the conditionalities indicated above, the capital
           subsidy could be converted into interest bearing loans.

    6. CPSU’s SERVICES

       The services of Central Public Sector Undertakings (CPSUs) have also been offered to the states, under MOUs signed
           with REC, for assisting the states in the execution of rural electrification projects as per their willingness and requirement.

    7. TECHNOLOGY DEVELOPMENT, CAPACITY BUILDING, MIS ETC.

       Upto 1 per cent of the total subsidy under the scheme would be used for associated works / efforts of the programme.

    8. MERGER OF EXISTING SCHEMES

       The existing “Accelerated Electrification of one lakh Villages and one crore Households” and the Minimum Needs
           Programme for rural electrification gets merged in to the scheme of RGGVY.

    9. EVALUATION

     The scheme will be subject to evaluation and a view on modification required for implementation during 11th Plan will be
           taken after a comprehensive review towards the end of 10th Plan.