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Deendayal Upadhyaya Gram Jyoti Yojana

Updated on: Mar 31st, 2022 - 10:22:08 AM

7 min read

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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.

Objectives of DDUGJY

The Ministry of Power launched the DDUGJY for rural areas with the below objectives:

  • Providing electrification to every village
  • Feeder separation for ensuring sufficient power to farmers and regular power supply to other consumers
  • Improving the sub-transmission and distribution network to enhance the reliability and quality of the power supply
  • Metering for reduction of the losses

Components of DDUGJY

The DDUGJY has the following components:

  • Separation of non-agriculture and agriculture feeders to facilitate judicious rostering of power supply to non-agricultural and agricultural consumers in the rural areas
  • Strengthen and augmentation of Sub-Transmission and Distribution (ST&D) infrastructure in the rural areas, including metering at feeders, distribution transformers and end consumers 
  • Rural electrification, as per Cabinet Committee on Economic Affairs (CCEA) approval for completing targets laid down under the RGGVY for the 12th and 13th Plans and carrying forward the approved outlay for the RGGVY to the DDUGJY

Scope of Work Under DDUGJY

Under the DDUGJY, the eligible entities can undertake projects in the following works for rural areas:

  • Separation of non-agriculture and agriculture feeders
  • Micro-grid and off-grid distribution network
  • Strengthening of sub-transmission and distribution system
  • Metering

Eligible Entities Under DDUGJY

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.

Works Not Permitted Under DDUGJY

The following works are not eligible for coverage under the DDUGJY scheme:

  • Works already sanctioned under other government schemes such as NEF, RGGVY, R-APDRP, etc
  • The projects/works for which other subsidy or grant is already been proposed or received from the Government of India 
  • Underground cable works
  • Service lines to APL consumers
  • Civil works other than sub-stations 
  • Cost of land for substations
  • Compensation towards the right of way 
  • Office equipment or fixtures 
  • Distribution automation and IT applications 
  • Spares other than mandatory spares
  • Vehicles
  • Tools and Plants (T&P) 
  • AMR or AMI, smart metres and prepaid metres. 
  • Establishment expenditure and salaries.

Implementation of DDUGJY

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. 

Funding Under DDUGJY

The funding mechanism under the DDUGJY is as follows:

AgencyNature of SupportQuantum of Support for Other than SpecialCategory States ( (percentage ofproject cost)Quantum of Support for SpecialCategory States  (percentage ofproject cost)
Government of IndiaGrant6085
DISCOM ContributionOwn fund105
Lender (Banks/FIs)Loan3010
Additional grant from the government upon achieving prescribed milestonesGrant50% 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 milestonesGrant7590

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. 

Benefits of DDUGJY

  • Every village and household will be electrified
  • Growth in the business of small and household enterprises, resulting in fresh avenues for employment
  • Increase in agriculture yield
  • Improvement in accessibility to telephone, radio, internet, television, mobile, etc
  • Improvement in education, health, and banking (ATM) services
  • Accessibility of electricity to panchayats, schools, police stations, hospitals, etc
  • Betterment in social security as a result of the availability of electricity
  • Rural areas will get an increased opportunity for comprehensive development

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.

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