A Village’s Journey To Electrification, And Why ‘100%’ Claim Rings Hollow

Sarwara (Unnao, Uttar Pradesh): Aspirations had been kindled among the young in Sarwara village as long back as the year 2000, when teenagers such as Shashikant Shukla, now 36 years old, would pay Rs 17 to recharge lead batteries to power their cassette players.

In this village in Uttar Pradesh’s (UP) Unnao district, 500 km east of India’s capital New Delhi, songs from qawwali singer Altaf Raja and from Salman Khan’s movies were top hits. Whenever these songs played at Shukla’s house, people of all ages would gather to listen. “It used to look like a mela [fair],” recalled Shukla in a conversation with FactChecker.

Batteries were the only source of power in the village back then. One battery would run out in 12 hours if used at a stretch, and the closest market to have it recharged was 5 km away by bicycle--the only means to reach it--through a terrible, rocky, dirt track. “I used to visit Lucknow [capital of UP, 40 km north of Unnao] and think how comfortable life would be if electricity reached my village,” Shukla said.

Years later, Shukla’s wish came true--in March 2018, he got an electricity connection under the Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya), a central government scheme launched in September 2017 with the aim of connecting 100% households to grid electricity by December 2018.

Thankful to finally have electricity, Shukla is nevertheless disappointed, even angry, that his village receives no more than 12 hours of electricity in a day, much like most villages in UP.

Some 4.7 million rural households in UP (as on October 17, 2018) have been connected since the launch of Saubhagya--about 390,000 households per month. The state will now have to electrify 4.4 million houses per month--11 times its current monthly progress-- to reach its 100% household electrification goal by the end of 2018.

This story continues our investigation--as part of a FactChecker series--into the government’s flagship programmes in the run-up to the 2019 general elections. The first of this series was a three-part investigation of the government’s rural-jobs programme (here, here and here) and the second was an analysis of the Swachh Bharat (Clean India) Mission's sewage problem.

The present investigation of India's village electrification programmes has three parts. The first part explained why despite "100% electrification" of India's 600,000-plus villages, there are 15 million homes still without electricity. The second part took you to Manipur's remote Leisang village--supposedly the last Indian village to be connected to grid electricity on April 28, 2018--and explained why after a high-profile launch and great hope, it has lapsed back into darkness. This third part takes you to Sarwara village in central Uttar Pradesh to reveal why a village that has been declared electrified cannot keep the lights on.

Powerless in rural UP

The future of India’s electricity consumption, which is currently just 14% of the average per-capita consumption of Organisation for Economic Co-operation and Development (OECD) countries, depends on the likes of Shukla. And Shukla is restless. “If a city-dweller receives round-the-clock electricity, why do we not get the same treatment? We can also pay for our electricity,” he said.

To supply 24x7 power, the state would have to improve generation capacity, or purchase power from outside. Currently, it fails to meet peak-hour demand by more than 10% annually, the second highest in India after Jammu and Kashmir (20%).

To improve generation capacity or purchasing power, the state’s electricity sector must be in good shape. For one, the state’s electricity distribution companies’ financials must improve. Forced to subsidise household and agricultural consumers, power utilities’ losses totalled Rs 21,486 crore ($3.2 billion) by 2016, enough to pay the electricity bills of 100 million households for more than a month (at 10 units per day per household at Rs 5 per unit), IndiaSpend reported on April 2, 2018.

All these problems must be tackled if UP is to connect its nine million unelectrified rural households (as on October 17, 2018), which make up 27% of the 33 million rural households in the state, to the grid.

A rural family’s first experience of electricity

Within three months of getting an electricity connection, Shukla’s house had a ceiling fan, a television with a satellite dish, and bulbs to light up the entire house, which consists of one bricks-and-cement pucca room and three mud-and-bricks kutccha rooms, with an open courtyard in the centre.

In other houses in the village, electronic appliances received as dowry but thus-far unused were finally put to use and new ones bought afresh. The village which used to sleep by 9 p.m. now watched daily soaps on TV till midnight, Shukla chuckled.

In Shukla’s house, electricity serves a different purpose for every person--it means a good night’s sleep under a ceiling fan for his 70-year-old father, Ramsharan Shukla, who spends most of his day tending to his farms. For Shukla’s mother Gayarani, 65, the light bulbs illuminate her kitchen, which had always been lit with a dim kerosene lamp. She also enjoys watching soap operas on TV, no longer having to wait for her occasional trips to her daughter’s house in Lucknow city, where she first encountered her favourite soap characters. For 14-year-old Ayush, Shukla’s nephew, TV has brought the pleasure of cartoons and films.

Although electricity poles had reached the village in 2015, only a dozen well-to-do families could afford the connection, which required an upfront installation cost of Rs 2,200 and a monthly fixed charge of Rs 200 per month.

This was too high for the majority of Sarwara residents, about 90% of whom depend on agriculture, most of them being marginal farmers cultivating up to one hectare of agricultural land.

March 2018 brought a change. People from the electricity department came to Sarwara and said there would be no installation charge for a new connection and electricity would be free for the first few months, Shukla told FactChecker. His connection was five months old when we met, and he had not received a bill yet.

“We heard from somewhere that electricity for the first three months would be free and a monthly fixed charge of Rs 400 would be applicable thereafter. But we have not heard anything from the officials,” Shukla said.

This is not correct. The Saubhagya scheme is designed to charge for every unit of metered electricity.

Free electricity for three months was the only reason some Sarwara residents agreed to get the connection, Shukla said, adding, “Once they start receiving their monthly bills, it will be interesting to see if many of them will continue to keep the connection.”

Speaking for himself, Shukla said he was willing to pay for the electricity his family consumed, even if the amount exceeded the fixed charge of Rs 400.

This is remarkable, because Shukla owns a 0.6 hectare farm, and his family’s annual income is Rs 20,000. This amounts to Rs 1,600 per month for the family of four, yet Shukla’s house has three mobile phones that are cumulatively recharged monthly for Rs 500.

The erratic power supply and periodic power cuts thwart his aspirations, he said. One fan was the only appliance he used, he said.

To get an idea of how much electricity Shukla’s family could consume, we jotted down his electricity usage:

Appliance	Watt	Per Day Usage	Usage Cost Per Month At Rs 3.5/Kwh
1 Fan	75	8 hours	Rs 63.88
1 TV	110	6 hours	Rs 70.27
3 Bulbs	50 (Each) = 150	4 hours	Rs 63.88
		Total	Rs 198

With the appliances Shukla has, he would consume electricity worth about Rs 200 per month on average. His current consumption is limited by the duration for which electricity is available in the village, of course, and could rise if electricity supply improves.

“Usually night is the time when the village receives electricity the most. During the day, it stays no more than two hours,” Shukla said. In all, there is no more than 12 hours’ supply in 24 hours.

Not enough electricity to power all households

The power cuts in Shukla’s village stem from UP’s power deficit--the state generates less power than there is demand for, and does not purchase enough to meet the shortfall.

During demand peaks, UP’s power deficit (called peak deficit) stood at 10.9% in 2017-18, the second largest in the country after Jammu and Kashmir (20%) and about five times the all-India average of 2%, according to a March 2018 report of the Central Electricity Authority (CEA).

The average monthly peak demand in UP in 2017-18 was 20,274 megawatt (MW) against the availability of 18,061 MW, with the state falling short by 2,213 MW, as per the CEA report.

Sarwara is an example of how electrifying households does not guarantee better electricity access. More than 58,000 electrified villages across India receive less than or equal to 12 hours of electricity in a day, according to an internal report by the central rural development ministry.

Over 40% of houses among 8,600 surveyed in the six most energy-deprived states of India--Uttar Pradesh, Bihar, Jharkhand, West Bengal, Madhya Pradesh and Odisha--do not even get 12 hours of supply in a day, according to this 2015 survey by the Council on Energy, Environment and Water (CEEW), a Delhi-based think-tank, and Columbia University.

The quality of electricity service provided to villages newly electrified under the Saubhagya scheme is worse than that of villages electrified earlier, concluded this February 2018 paper. “This points at the need for the Government of India to prioritize not just access to power, but access to quality electricity supply, which will require tariff, monitoring and business model reform,” said the paper authored by Daniel Robert Thomas of Columbia University and Johannes Urpelainen of Johns Hopkins University. The paper was published in The Social Science Research Network (SSRN), a peer-reviewed journal.

Discoms in poor financial health

The roots of the problem lie in the governance of India’s power sector. Lacking regulatory autonomy, many state electricity distribution companies (discoms) have to sell electricity at prices well below the cost of generation, transmission and distribution, said the SSRN paper.

As a result of cross-subsidy--when urban and industrial consumers are charged higher prices so that agricultural and rural consumers can be charged lower--distribution companies are unable to generate enough revenue to maintain infrastructure in rural areas. For the same reason, they have no incentive to improve the quality of rural supply because they lose money for every unit of power sold in rural areas, the paper explained.

UP Discoms’ Financial Indicators
Ability To Cover Costs: Financial Parameters	2010-11	2011-12	2012-13	2013-14	2014-15	2015-16
Actual Cost of Supply or ACS (Rs/kWh)	3.64	3.71	4.78	6.12	5.64	5.51
Average Revenue Realization Without Subsidy (Rs/kWh)	2.69	2.58	2.81	3.29	3.39	3.79
Gap (ACS - Average Revenue Realization) Without Subsidy (Rs/kWh)	0.95	1.13	1.97	2.83	2.25	1.72
Total Revenue Gap/(Surplus) (Rs crore)	9,950	15,968	17,844	22,870	27,385	30,016
Subsidy (Rs crore)	2,058	3,596	4,690	5,174	10,343	8,530
Gap After Subsidy (Rs/kWh)	0.6	0.62	1.33	2.16	1.06	0.75
Revenue Gap After Subsidy (Rs crore)	7,892	12,372	13,154	17,696	17,042	21,486

Source: International Institute Of Sustainable Development

On every kilowatt-hour or ‘unit’ of electricity that UP discoms supplied in 2016-17, they bore a loss of Rs 1.72, 45% up from Rs 0.95 in 2010-11, according to a March 2018 study by the Global Subsidy Initiative (GSI), an arm of the International Institute of Sustainable Development (IISD), a think-tank.

To help fill this gap, the UP government transfers financial subsidies to discoms. However, despite the subsidies that offset the major part of their losses, UP discoms still could not meet the cost of supply in 2016-17 and registered a loss of Rs 0.75 per unit of electricity supplied, the study said.

The gap between the cost of supply and revenue realized for UP discoms improved after 2014-15 due to some measures they took to reduce their distribution losses, so that the loss per unit of electricity, without subsidies, decreased by 40% over three years to 2016-17 (with subsidies, the gap closed by 65%).

Yet, despite all measures, UP discoms ran up losses totalling Rs 21,486 crore ($3.2 billion) by 2016, enough to pay the electricity bills of 100 million households for more than a month (at 10 units per household per day at Rs 5 per unit), IndiaSpend reported on April 2, 2018.

To fix the losses that discoms bore across states and get them out of debt, the central government in 2015 launched the Ujwal DISCOM Assurance Yojana (UDAY). UP joined the scheme late, in 2017, so it has not made any measurable difference in the state, as IndiaSpend reported on April 2, 2018. Since March 2017, when UP joined the scheme, the UP government and the state’s discoms have saved Rs 3,323 crore–just 15.46% of their total losses.

Politics to blame

Shukla of Sarwara voted for the Bharatiya Janata Party (BJP) in 2014, having been moved by its promises of better electricity supply, higher farm incomes and good administration.

“These parties promise us free electricity or 24 hours electricity to get our votes but then they never care if these wires, which are connecting our houses to the pole, ever receive power,” Shukla said.

Political parties and their populist measures are to blame for the bad health of the electricity sector in UP, a June 2017 study by the Centre for Policy Research (CPR), a Delhi-based think-tank, had said.

Successive ruling parties have adopted populist measures such as decreasing electricity tariffs for homes and offsetting the reductions by increasing tariffs for industrial and commercial establishments, and by providing free electricity to poor households. Each government has left it to succeeding governments to implement reforms, the CPR study said.

“This has led to delays in the execution of several reforms, particularly in the electricity sector, where the quantum of subsidies has increased over the years and electricity quality and expansion has been under-served by discoms, which have been in financial difficulties,” the CPR study said.

“The BJP government has gotten the electricity to my house, the only thing remaining now is if Modi-ji could also fix these power cuts,” Shukla said.

In the upcoming 2019 elections, Shukla said he would support the BJP again. “The PM could not do as much as I expected but I will still support him given that there is no better option,” he said.

(Tripathi is a principal correspondent with IndiaSpend.)

This is the third of a three-part series investigating the government’s electrification claims. You can read the first part here and the second part here.

These stories are part of a series evaluating flagship government programmes in the run up the 2019 general elections. You can read the first part on the rural jobs programme here, here and here, and the second part on the sewage problem of the national toilet-building scheme here

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