Model schemes to boost rural electrification
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In order to encourage large scale investment in the otherwise unattractive area of rural electrification, the Centre proposes to evolve model schemes in consultation with Reserve Bank of India (RBI) and National Bank for Agriculture and Rural Development (Nabard).
Besides, to ensure revenue sustainability and improve services to consumers, the draft rural electrification policy has made a strong case for deployment of franchisees for management of local distribution in rural areas. Franchisees could be non-government organisations, users’ associations, cooperatives or individual entrepreneurs. The policy has suggested that the state government would also consider giving the responsibility to panchayat institutions if these have developed to the extent that they can undertake contractual obligations, raise resources from market and discharge associated legal responsibilities. The Centre is also mulling the option of an annuity-based approach for provision of capital subsidy for decentralised generation systems to ensure enforcement of performance guarantees, efficient operation and maintenance along with repairs and reliable power supply. The extent of such capital subsidy to these systems would be determined to achieve parity in consumer tariffs between remote villages yet to be electrified and adjoining grid connected villages. The policy aims at providing access to electricity to all households by 2009 and minimum lifeline consumption of 1 unit per household per day as a ‘merit’ good by 2012. The draft policy, a copy of which is in FE’s possession, emphasises the need for seeking least cost options after taking into account full life cycle costs and explicit and implicit subsidies in different delivery options and mechanisms. Top sources told FE that General Electric’s foray in rural electrification may trigger investments from other investors as the policy addresses issues faced by investors and also by states and other utilities. Source: The Financial ExpressMore |
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