Rajiv Gandhi Grameen Vidyut Yojana

In September, 2024, an analysis of the Rajiv Gandhi Grameen Vidyut Yojana (RGGVY) revealed that the economic benefits of electrification are significantly higher in larger villages. Villages with fewer than 300 people saw minimal improvements, whereas those with around 2,000 people experienced substantial gains.

Key Points

Increased Per-Capita Expenditure: Villages with about 2,000 residents saw their per-capita monthly expenditure double, rising by approximately ₹1,428 (about $17) due to full electrification.
Limited Benefits for Smaller Villages: Villages with 300 people experienced negligible changes in per-capita expenditure.
For these smaller communities, full electrification had less than a 27% chance of providing economic benefits that surpass initial costs.
Return on Investment: Larger villages showed a 33% return on investment, far exceeding cost-effectiveness benchmarks.
In contrast, smaller villages yielded “zero return” after 20 years. The study suggests a 90% chance of economic benefits exceeding costs for larger villages.
RGGVY Background: Launched in 2005 and renamed to Deen Dayal Upadhyay Gram Jyoti Yojana in 2015, the RGGVY aimed to electrify villages with 300 or more inhabitants.
Electrification Status: As of 2018, Prime Minister Narendra Modi claimed that all villages in India were electrified. However, providing 24/7 power remains an ongoing challenge. Current data shows nearly 99% electrification across India.
Energy Source Considerations: The study suggests that its findings are relevant even if future electricity sources shift from coal to renewable energies like solar, wind, or hydropower. India’s future electrification efforts are increasingly focused on non-fossil-fuel sources.