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The power supply availability in rural areas is unreliable and inadequate in many parts of India. The power distribution utilities resort to constant load shedding in rural areas for mitigating the gap between demand and supply. The frequent load shedding in rural areas affects the power supply to agricultural consumers and non-agricultural consumers due to a common distribution network.
The demand for electricity in rural areas is rising daily due to lifestyle changes, increased customer base and consumption patterns. However, because of the poor financial health of the distribution utilities, there is under-investment in the distribution network resulting in poor maintenance of assets, especially in rural areas. Thus, strengthening sub-transmission and distribution infrastructure is necessary to ensure quality and reliable power supply in rural areas.
The Government of India launched the Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) in 2015 for rural electrification. The government subsumed the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) with the DDUGJY scheme. The RGGVY scheme was launched for village electrification and to provide electricity distribution infrastructure in rural areas. The Rural Electrification Corporation (REC) is the nodal agency for implementing the DDUGJY.
The Ministry of Power launched the DDUGJY for rural areas with the below objectives:
The DDUGJY has the following components:
Under the DDUGJY, the eligible entities can undertake projects in the following works for rural areas:
All Distribution Companies (DISCOMS), including State Power Departments and private sector DISCOMS (referred to as Utilities), are eligible for financial assistance under the DDUGJY scheme. In the case of private sector DISCOMS, where the power supply distribution in rural areas is with them, the projects under this scheme will be implemented through the respective State Government agency. The State Government or State-owned companies will own the assets created under this scheme.
The Rural Electric (RE) Cooperative Societies are also eligible to undertake projects under this scheme. But, they are required to submit annually audited statements regarding the utilisation under the approved project through the concerned DISCOM and the State Cooperative Department.
The following works are not eligible for coverage under the DDUGJY scheme:
The DISCOMS are responsible for preparing the Need Assessment Document (NAD)/Detailed Project Reports (DPRs) and online submission of the DPRs recommended by the State Level Standing Committee (SLSC) to the nodal agency. Under the Chairmanship of the Secretary (Power), the monitoring committee will approve the submitted projects and monitor the scheme’s implementation.
The REC will submit the proposals to the Ministry of Power for releasing funds to the DISCOMS when the formalities for release are completed. The projects will be implemented on a turn-key basis. A suitable tripartite agreement will be executed between REC on behalf of the Ministry of Power, the DISCOM and State Government to ensure the scheme’s implementation as per the scheme’s guidelines. A bipartite agreement will be executed in the case of state power departments.
The funding mechanism under the DDUGJY is as follows:
|Agency||Nature of Support||Quantum of Support for Other than SpecialCategory States ( (percentage ofproject cost)||Quantum of Support for SpecialCategory States (percentage ofproject cost)|
|Government of India||Grant||60||85|
|DISCOM Contribution||Own fund||10||5|
|Additional grant from the government upon achieving prescribed milestones||Grant||50% of total loan component (30%), i.e 15%||50% of total loan component (10%), i.e. 5%|
|Maximum grant by the government including additional grant upon achieving prescribed milestones||Grant||75||90|
The minimum contribution by the DISCOMS is 10% (5% in the case of special category states). However, the DISCOMS contribution can be up to 40% (15% in the case of special category states) if they do not avail of a loan. If the DISCOMS do not avail loan, the maximum additional grant eligible is 15% (5% in the case of special category states) upon achieving prescribed milestones.
During April 2015 and 14 August 2015, a total of 1654 villages were electrified under the DDUGJY. From 15 August 2015 to 17th April 2016, additional 5689 villages were electrified after the government took the DDUGJY on mission mode.