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Access to electricity in rural areas had differential benefits, says study

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Access to electricity in rural areas had differential benefits, says study

  • A recent analysis of the Rajiv Gandhi Grameen Vidyut Yojana (RGGVY) highlights disproportionate benefits for larger villages compared to smaller ones.
  • The study was conducted by researchers from the University of Chicago and the University of Maryland.

Electrification Disparities

  1. Larger Villages Benefit More
  • The villages with fewer than 300 people saw limited gains.
  • The villages with over 2,000 people experienced significant economic improvements.
  1. Per-Capita Expenditure
  • In small villages of around 300 people, per-capita monthly expenditure remained mostly unchanged.
  • In larger villages (about 2,000 people), per-capita monthly expenditure increased by ₹1,428 (about $17).

Economic Impact of Electrification

  • Villages with 300 people experienced "zero return" from electrification after 20 years.
  • Villages with 1,000 people saw a 13% return, just exceeding cost-effectiveness benchmarks.
  • Villages with 2,000 people saw a 33% return, far surpassing the benchmark, with a 90% chance of generating benefits that exceeded upfront costs.

High Costs, Limited Benefits

  • The study highlighted that providing electricity to small, remote villages is expensive and does not significantly reduce poverty.

Rajiv Gandhi Grameen Vidyut Yojana (RGGVY)

  • Launched in 2005 to improve electricity access in approximately 400,000 Indian villages.
  • In 2015, the RGGVY was renamed the Deen Dayal Upadhyay Gram Jyoti Yojana.
  • Under this scheme, families who are below the poverty line will receive electricity free of cost.
  • Under this, villages with 300 or more inhabitants were eligible for electrification.
  • As of 2018, the Prime Minister declared that all Indian villages were electrified.
  • Though the commitment to providing 24/7 power is still ongoing.

Prelims Takeaway

  • Rajiv Gandhi Grameen Vidyut Yojana (RGGVY)

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