India is a predominantly rural country. Almost 70 per cent of its 1.2 billion people reside in over 600,000 villages. However, there is a lopsided equation when it comes to the contribution of the rural populace to the share of GDP. So, even with 70 per cent of the people in rural areas, the contribution of agriculture, which is the mainstay of their gainful and productive economic activity, has been steadily declining. It stood at about 13 per cent in 2012/13.
With the decline in the contribution of agriculture to the GDP, there have been corresponding fall-outs like increase in rural joblessness and migration to the urban areas. To enhance the status of civic amenities in the rural areas has been one of the ambitious goals of the development process. Apart from raising the standards of living in rural areas, this process is also aimed at preventing migration to urban areas, as this process also stretches the limits of the infrastructural facilities in cities that are already bursting at the seams.
But this process that has earned an acronym - PURA (Providing Urban facilities to Rural Areas) - has hit a severe roadblock due to energy shortages. Technically, the process of rural electrification has made great strides, but there are issues related to individual connectivity, quality of power and its duration of supply that continue to adversely impact both the quality of life and rural productivity.
Having self-contained villages is an old Gandhian idea, propounded at length by the father of the nation in his concept of gram swaraj or village republics. But it is the advent of solar power technology that has provided the economic feasibility aspect to this route of empowering the rural folk. Though his ideas were formulated in the middle of the 20th century, these have become viable only in the 21st century. Now, the possibility of using renewable sources of energy like solar power, wind and biomass/gas-based power generation can lend an entirely new dimension to the Gandhian concept of village-based rural development and people's empowerment, with the added advantage of harnessing science and technology for humanitarian purposes.
Currently, it takes five to six years for all conventional power projects to get started and there is a further time-lag before the power actually reaches the remote villages. But all the sources of renewable energy - solar, wind and biomass - lend themselves to the setting up of power projects at a fast pace. The raw materials are all locally available and there is virtually no restriction on their supply. Indeed, each village can have its own power station with the villagers being empowered stakeholders. This can be networked into the grid systems of the state-owned or privately run utility wherever feasible or operate as a stand-alone system. Both the models could be self-sustaining with all the advantages of green power and eco-friendly operations.
This route of renewables for empowering rural India has an enormous potential considering that nearly 40 per cent of the 1.2 billion-strong population do not have much of a realistic hope of accessing grid power in the near foreseeable future. The renewable route also offers a fresh avenue of job creation, as the task of operating and maintaining these facilities can be effectively achieved only by locally trained personnel. With self-help groups gaining wider currency in the rural landscape, there is considerable scope to extend the activity of power generation and maintenance to this network of home-grown groups. Over the years, they have inculcated a sense of community participation and financial discipline as well a strong microfinancing base.
The renewable route is also becoming increasingly doable as the initial costs of installing the devices are coming down gradually. So, a solar device that would cost upwards of $2 per watt a few years ago, is now down to 50 cents a watt. In this backdrop, the need of the hour is to put in place a policy framework that enables a tripartite partnership to flourish - the industry, the consumers and the state/regulatory authority.
A creative, forward-looking policy with the right sets of checks and balances and initiatives would not only solve the problem of providing power to rural India, but also in a manner in which the villagers would be empowered from being helpless, literally powerless entities. They would enjoy the benefits of uninterrupted power supply along with some respectable gains from their participation in the power-generation project - solar or bio mass. For them, the transformation from helpless, powerless rural folk living in darkness after dusk to powerful citizens who are also power producers would be nothing short of a revolution. The Gandhian dream of villages being self-sufficient entities would also be realised.
Now to put in place an action plan, the government can take a two-pronged approach. The first one being "grid connected power" and the second, "off-grid power". In case of grid connected power, the government policy can be to provide power first to the village or community and the balance, if any, to the grid. For this, the local state distribution company (discom) will have to contract with the village or group of villages, at the rate at which the discom will buy power. This rate can be a flat rate for a fixed period of, say, 10 to 15 years. The revenue earned from this can go to the local village panchayat, or any other local community, which can be used for further development of the community, like building schools, hospitals, etc., and also maintenance of the renewable energy plant. Some parts of India have small pilots running on this, but not on a large, organised scale. The challenge with this approach would, however, be that the state distribution or transmission company will have to build the last-mile connectivity till the village, which can be a significant cost.
The second approach is the off-grid option. For this, the government or financial corporations with government backing can give an initial grant to the village or group of villages for an off-grid installation. This off-grid installation can be a solar plant, small water hydro, biomass, etc. Depending on the amount of power produced, each household will have a limited capacity which they can use.
Any usage above the maximum would lead to disconnection of that household from the power being supplied. The advantage here is that this will not only give power that is produced locally, eliminating the need for last-mile connectivity, but it also has the potential to provide employment to local youth. The revenue stream here would be the payment that each village house makes to the panchayat for what they use.
In order to limit the usage, prepaid meters can be given to the villagers. The entire logistics can be run by the local panchayat, with the panchayat owning up the security and equipment of the local power station. This off-grid option is feasible for areas that are so remote that it does not make economic sense to connect them to the grid. There are high level policies existing for off-grid and on-grid installations. What is required, in case of on-grid, is for the local government to take up the initiative and propagate the same in its area. However, in case of off-grid, the private sector needs to step up to make the business case and sell the same to local governments with the government supporting with bank financing to the local communities so that the initial capital costs can be covered.
With this public and private sector support, rural areas can turn around with non-conventional sources of power.
(Manu Rishi Puri is Principal, Resources Group, Accenture Services)