Industry Trend Analysis - Electricity Supply To Remain Key Policy Priority - OCT 2017


BMI View: Modi ' s pledge to deliver free electricity connections to all the Indian population by the end of 2018 aligns with our long-held view that the Prime Minister will continue to prioritise power sector reform in India. Bringing the ' electricity to all ' target forward by a year is a strategic move by the government, given that the next general election in the country is in 2019.

Indian Prime Minister Narendra Modi announced in late September that he intends to deliver free electricity connections to all the Indian population by December 2018, as part of a USD2.5bn programme called 'Saubhagya'. Whilst consumers will have to pay monthly electricity bills for power usage, connecting the household to a source of electricity will be free. This will entail providing power to around 3,000 villages, mostly in rural and inaccessible areas, mainly through the use of solar systems and battery storage.

This announcement aligns with our long-held view that the power sector would be a key focus for the Modi administration, given his proven track record of power sector reform during his time as Chief Minister of Gujarat ( see 'Power Sector To Be Modi-Fied', May 22 2014). In particular, we note that improving coal supply to power generators, incorporating renewable energy into the power mix and improving electricity access are all priorities for the government and significant progress has already been made in relation to these aims ( see ' Power Snapshot: Robust Growth Across All Sectors ' , August 23). As such, we are optimistic with on Modi's plan to provide electricity to all households by the end of 2018.

Indian Population Underserved
Electricity Consumption Per Capita By Country (TWh)
f = BMI forecast. Source: EIA, BMI

This article is part of our Asia Pacific coverage. To access this article subscribe now or sign up for free trial