7 PM | Saubhagya Scheme-An analysis | 30 January, 2019

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Saubhagya scheme:

  • The Pradhan Mantri Sahaj Bijli Har Ghar Yojana or Saubhagya Scheme was launched in September 2017 with the aim to achieve universal household electrification by providing last mile connectivity and electricity connections to all households in rural and urban India.
  • States and Union Territories are required to complete household electrification by 31st march 2019
  • The Rural Electrification Corporation Limited (REC) is the nodal agency for the operationalization of the scheme throughout India

Need For the scheme

  • Rural electrification scheme Deen Dayal Upadhyay Gram Jyoti Yojana considered a village electrified even if 10% of its households had access to power.
  • But this has led to public places like municipalities, panchayats, and hospitals in villages being electrified, leaving many households un-electrified despite the 100 per cent rural electrification claim. This had necessitated introduction of a scheme focusing on universal household electrification.
Note: Deen Dayal Upadhyaya Gram Jyoti Yojana aims to provide continuous power supply to rural India. The scheme replaced Rajiv Gandhi Grameen Vidyutikaran Yojana


Scope of the scheme:

  1. Under the scheme free electricity connections are provided to below poverty line (BPL) households,
  2. Other households have to pay ₹500 for the connection. This is recoverable by the power distribution company in 10 instalments along with the electricity bills.
  3. The scheme envisages electricity connection for each household by drawing a service cable from the nearest electricity pole to the home, installing an energy meter, and wiring for a single light point with an LED bulb and a mobile charging point.
  4. Solar Photovoltaic (SPV) based standalone system to be provided for un-electrified households located in remote and inaccessible villages/habitations, where grid extension is not feasible or cost-effective.

Benefits of the Scheme:


  • Of the 18 crore households in India, about 18 per cent remained un-electrified in October 2017
  • Since its inception, the scheme has electrified 99.97% of un-electrified households (as on 30th January, 2019)



  1. Financial Condition of DISCOMS: Despite the implementation of the Ujwal Discom Assurance Yojana (UDAY) scheme, the financial condition of DISCOMS remain a serious concern
  2. Metering, billing and collection: Enlarged network and consumer base; particularly new connections in rural India metering, billing and collection is a challenge for DISCOMS
  3. Burden of power bills: A free electricity connection under the Saubhagya Scheme eases the financial burden on the poor to some degree, but does not address the recurring burden of electricity bills. Therefore, only those households who can afford to pay for regular electricity consumption will benefit from the scheme.
  4. Electricity Theft: For many poor households, the high recurring costs of electricity consumption provides an incentive to indulge in electricity theft. The lack of adequate skilled resource to keep theft in check is a concern.
  5. Quality of service: DISCOMS often resort to load-shedding in order to reduce their costs, and in such a scenario, reliable electricity supply is a major concern. The Saubhagya scheme fails to ensure quality of service.
  6. Resorting to other fuels: Due to reliability issues, electricity is generally a substitute and not alternative to fuels such as kerosene. Due to frequent power cuts and erratic electricity supply, households continue to use kerosene, diesel gensets and other fuels to augment their need for energy.
  7. Limited range of appliances: The scheme does not provide access to three-phase electricity and thus the range of appliances that the poor households can use are severely limited. This further hampers economic productivity for poor households.

Way Forward:

  1. Along with electricity connections, the government must ensure reliable electricity supply to rural and urban poor. In order to provide the same, the government needs to address problems related to actual hours of supply.
  2. In addition to the UDAY scheme, incentives should be provided to minimise power thefts and illegal connections in order to reduce financial losses incurred by DISCOMS
  3. A free electricity connection would only lessen half of the financial burden on poor. Thus it is important to address the issue of affordability by ensuring cheap electric supply.
  4. Further, electricity access should be viewed beyond lighting and mobile recharging, to promote livelihood enhancement through productive use.
  5. Ensuring effective monitoring and governance for better transparency and accountability is a key driver for successful implementation and sustenance of the universal household electrification.
  6. Along with increasing capabilities for power generation, it is also important to explore avenue that promote energy efficiency. Household LED light distribution program UJALA is a step in the right direction.

    Source: Yojana February, 2019

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