FM tells states to act on rural power plan

In a missive to the state governments on Monday, Finance Minister P Chidambaram asked them to provide necessary support to the centre to expedite implementation of rural electrification scheme — Rajiv Gandhi Grameen Vidyutikaran Yojana.

The government has allocated Rs 5,500 crore in the Budget 2008-09 tabled in the Parliament by the finance minister on Friday.

The government intends to provide electricity to all 1.25 lakh rural households by the end of next calendar year. According to power ministry sources electricity connections have been provided to over 60,000 rural households till date.

“I can help put in the back bone (infrastructure support). But it is up to the state governments to provide electricity to these houses,” Chidambarm said while addressing industry associations in a post budget interaction.

During the 11th Five Year plan the government has made provisions of Rs 28,000 crore for the rural electrification programme. However, the power ministry blames the state governments for tardy progress of the scheme.

“We would have covered the entire rural households by the end of March 2009 but due to tardy progress of the scheme at the state level we now expect the scheme to be completed not before the end on 2009,” a senior official in the ministry said.

Over Rs 2, 200 crore have been spent on the rural electrification scheme till now. The finance minister while expressing concern at the transmission and distribution losses has also decided to provide Rs 800 crore for the Accelerated Power Development and Reforms project.

In his budget speech Chidambaram had said, “The poor state of transmission and distribution is a drag on the sector. Huge investments are required to be made in the transmission and distribution but linked to fundamental reforms. Hence, I propose to create a national fund for transmission and distribution reforms. The details of this scheme will be announced very soon.”