Energy policies by the Indian Government

Energy policies by the Indian Government

India has reached new heights in the energy sector in recent years. The Government of India, led by Honourable Prime Minister Narendra Modi and his cabinet ministers, has implemented numerous reforms in the energy sector to provide a secure, affordable, and sustainable system to meet the country’s energy demands for strong energy growth. The country has made significant strides to ensure that these policies are accessible to more than one billion Indians.

The government is currently focusing on deploying innovative ways to boost energy efficiency by promoting solar, replacing traditional lights with LEDs, and has launched the Ujwalla scheme to do so. Along with this, they have launched the Pradhan Mantri Ujjwala Yojna Scheme to address the health problems associated with air pollution in cities by assisting and facilitating the connection of 80 million houses to LPG to reduce the exposure of houseworkers to cooking stoves, which causes major respiratory issues in them.

India has implemented major energy pricing reforms in sectors such as coal, oil, gas, and energy, which is a fundamental right for all human beings under international law, to improve the health of those who are most affected. The government is also taking significant steps to encourage domestic energy production through an important reform known as the Hydrocarbon Exploration and Licensing Policy (HELP), as well as building up petroleum reserves in the country for use in the event of an emergency. It is estimated that between 2019 and 2020, approximately 750 million people gained access to electricity, reflecting the government’s strong desire to provide citizens with basic human rights.

Over the last decade, energy demand has skyrocketed across all sectors, including agriculture, industries, commercial, and residential, and this demand will undoubtedly increase in the coming years. According to data, India’s per capita energy consumption is 30%. India’s energy system is primarily based on coal-fired power generation, oil-based transportation and tourism, and biomass for residential living and cooking.

According to the Ministry of Power, as of April 2022, the Private Sector (49.0 percent) i.e., 1,95,637 MW has the largest percentage of Share, while the Central (24.6 percent) i.e., 99,005 MW, and State Sectors (49.0 percent) i.e., 1,04,855 MW have nearly equal shares. Since COVID-19 was implemented around the world, energy demand has increased to unprecedented levels, while supply from various sectors has also increased to unprecedented levels. The graph below depicts data obtained from the Central Electricity Authority from April 2020 to January 2022. There has been an increase in installation capacity by various sectors, with the Private Sector consistently at the top. Government sectors continue to struggle to meet demand, and they rely on the Private Sector to do so.

Policy Initiatives

The Electricity Act of 2003 was passed and went into effect on June 15, 2003. The goal is to introduce competition, protect the interests of consumers, and provide power to all. The Act includes provisions for National Electricity Policy, Rural Electrification, Open Access Transmission, Phased Open Access Distribution, Mandatory SERCs, License-Free Generation and Distribution, Power Trading, Mandatory Metering, and Strict Penalties for Electricity Thefts.

It is a comprehensive piece of legislation that replaces the Electricity Act of 1910, the Electricity Supply Act of 1948, and the Electricity Regulatory Commission Act of 1998. The Electricity Act of 2003 was amended twice, once by the Electricity (Amendment) Act of 2003 and once by the Electricity (Amendment) Act of 2007. The goal is to put the sector on a solid commercial growth path while also allowing the states and the center to move in harmony and coordination.

With a population of 130 crores and counting, the demand for electricity in various sectors of society has increased. It is the third-largest producer of electricity and the second-largest consumer. To that end, we continue to rely on the private sector, which handles the majority of demand and supply. In terms of generation, India continues to rely on traditional fossil fuels for power generation. Coal has the highest percentage of electricity generation (51.1 percent). Slowly, India is shifting away from fossil fuels and toward renewable energy sources for electricity generation; currently, wind and solar power generate a large percentage of electricity and have the largest market share across all sectors (27.5 percent ). The government will issue sovereign green bonds and grant infrastructure status to energy storage systems, including grid-scale battery systems, under the Union Budget 2022-23. Various schemes, such as the Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY) and the Integrated Power Development Scheme (IPDS), have been launched to increase electrification across the country.

Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY)

On July 25, 2015, Prime Minister Shri Narendra Modi launched the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) in Patna. The DDUGJY is one of the Ministry of Electricity’s main programs and intends to facilitate power delivery 24 hours a day, seven days a week. The Union Government authorized the DDUGJY Initiative, which was inspired by a similar pioneering scheme executed by the Gujarat government. This initiative will allow for long-awaited improvements in rural regions to begin. It focuses on feeder separation (rural homes and agriculture) as well as the upgrading of sub-transmission and distribution infrastructure in rural regions, including metering at all levels. The scheme’s main components are feeder separation, sub-transmission and distribution network strengthening, metering at all levels (input points, feeders, and distribution transformers), microgrid and off-grid distribution network, and rural electrification—projects that have already been sanctioned by under the RGGVY must be completed. The scheme has a budget of Rs 76000 crore for project implementation, with the Government of India providing a grant of Rs 63000 crore. A total of Rs 14680 crore worth of projects have already been authorized, with Rs 5827 crore worth of projects approved for the state of Bihar. An agriculture-intensive state like Bihar will profit from feeder separation works under this plan. Thousands of kilometers of new lines will be built, as well as hundreds of new substations. The execution of this strategy will result in increased agricultural production and household electricity.

Benefits from the Scheme

· Electricity will be provided to all communities and houses.

· Increased agricultural output

· Small and home businesses will expand, creating additional job opportunities.

· Health, education, and banking (ATM) services are all improving.

· Accessibility to radio, telephone, television, internet, and mobile phones, among other things, has improved.

· Improved social security as a result of the availability of energy

· Electricity supply to schools, panchayats, hospitals, and police stations, among other places

· Rural communities will have more opportunities for holistic development.

Achievements under DDUGJY RE:

As of 31.12.2021, a total of 1,365 projects with a total budget of Rs. 66,380 crore had been sanctioned under the former Rural Electrification (RE) program, with a GoI grant of Rs. 53,414 crore disbursed to the States. The following is a summary of physical progress:


  • 2,993 Sub-stations (Incl. augmentation of 2,101 Sub-Stations) commissioned
  • 10.14 Lakh Distribution Transformers commissioned
  • 7.83 Lakh CKm of LT Lines erected
  • 4.73 Lakh CKm 11KV Lines erected
  • 0.15 Lakh Ckm 33 & 66 KV HT Lines erected

Achievements under DDUGJY New:

As of 31.12.2021, 4,404 Projects with a total outlay of Rs. 47972 crore with the following components have been sanctioned against which GoI grant of Rs. 22,755 crore has been released to the States: The physical progress is as below:


  • 3,958 Sub-stations (including augmentation of 2,093 Sub-stations) commissioned
  • 3.95 Lakh Distribution Transformers commissioned
  • 1.23 Lakh CKms of new 11 KV line erected
  • 2.96 Lakh CKms of LT Lines erected
  • 0.28 Lakh CKms of HT Lines (33 & 66 KV Lines) erected
  • 1.22 Lakh CKms of 11 KV Feeders segregated
  • Energy Meters in 153.80 Lakh consumer premises, 2.53 Lakh Distribution Transformers & 0.13 Lakh 11 KV Feeders installed

Achievement under DDUGJY Addl. Infra

An amount of Rs.14,179 crore has been sanctioned to 20 States for the creation of additional infrastructure exclusively for Households covered under Saubhagya on the requests of the State. As of 31.12.2021, a cumulatively Gol Grant of Rs. 7165.52 crore has been released to the States. The physical progress is as below:


  • 228 Sub-stations (including augmentation of 220 Sub-stations) commissioned
  • 2.19 Lakh Distribution Transformers commissioned
  • 0.66 Lakh CKms of new 11 KV line erected
  • 1.96 Lakh CKms of LT Lines erected

Integrated Power Development Scheme (IPDS)

The Ministry of Power, Government of India, established the “Integrated Power Development Scheme” (IPDS) with the following goals:

1. In metropolitan areas, strengthening the sub-transmission and distribution network;

2. In urban locations, metering of distribution transformers, feeders, and consumers.

3. IT enablement of the distribution sector and strengthening of the distribution network, as approved by the CCEA on June 21, 2013, to meet the targets set out in the Restructured Accelerated Power Development and Reforms Programme (R-APDRP) for the 12th and 13th Plans by carrying forward the approved R-APDRP outlay to IPDS.

The project aims to reduce AT&C losses by establishing an IT-based energy accounting and auditing system, improving billed energy based on metered use, and increasing collection efficiency.

The scheme’s estimated cost, which includes the components of strengthening sub-transmission and distribution networks, as well as consumer metering in urban areas, is Rs. 32,612 crores, with a budgetary support requirement from the Government of India of Rs. 25,354 crore over the entire implementation period.

The element of IT capability of the distribution sector and enhancement of distribution network authorized by CCEA in June 2013 in the form of R-APDRP for 12th and 13th Plans would be absorbed in this scheme, and the CCEA-approved scheme outlay of Rs.44, 011 crores, including budgetary assistance of Rs. 22,727 crore, will be transferred over to the IPDS plan.

Pradhan Mantri Sahaj Bijli Har Ghar Yojana –“Saubhagya”

It is a scheme to electrify all interested households in the country, including in rural and urban locations. The goal of the ‘Saubhagya’ is to attain universal home electrification inside the country by providing last-mile access and power connections to all remaining un-electrified houses in rural and urban regions. The recipients of free power connections would be determined using data from 2011 Socio-Economic and Caste Census (SECC). Un-electrified houses not covered by the SECC data would, however, be given power connections under the program for a fee of Rs. 500, which would be collected by DISCOMs in ten installments via the electricity bill. Five LED lights, one DC fan, and one DC power socket are included in the solar power packs of 200 to 300 Wp with a battery bank for un-electrified houses in remote and inaccessible places. It also includes 5 years of Repair and Maintenance (R&M).

Implementation Process

Modern technology, such as a mobile app, will be employed for household surveys to facilitate and hasten Scheme implementation. Beneficiaries will be identified, and their application for an electrical connection, together with an applicant image and proof of identity, will be registered on the spot. In conjunction with Panchayat Raj Institutions and Urban Local Bodies, Gram Panchayats/Public Institutions in rural regions may be authorized to collect application forms and complete documentation, issue bills, and collect income. The Rural Electrification Corporation Limited (REC) will continue to be the nodal agency for the scheme’s nationwide implementation.

The project’s overall cost is Rs. 16,320 crores, while the Gross Budgetary Support (GBS) is Rs. 12,320 crore. The rural household outlay is Rs. 14,025 crores, whereas the GBS is Rs. 10,587.50 crore. The budget for urban families is Rs. 2,295 crores, while GBS is Rs. 1,732.50 crores. The Government of India will contribute significantly to the Scheme’s funding for all States/UTs.


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