In September 2017, the Indian government launched a new scheme known as Saubhagya (short for Sahaj Bijli Har Ghar Yojana). The scheme aims to achieve universal household electrification in rural areas, as part of Prime Minister Narendra Modi’s push to ensure power for all. Under Saubhagya, poor households—those with an Above Poverty Line (APL) or Below Poverty Line (BPL) ration card—can apply for a connection to the grid at no or reduced cost. BPL households also receive forty meters of cable, one LED light bulb, one electricity board, and a meter to measure consumption.

The Initiative for Sustainable Energy Policy (ISEP) is currently rolling out a randomized controlled trial in the state of Uttar Pradesh (UP) aimed at assisting households in applying for connections, by both providing information about the process and cost of application and by facilitating delivery of the application to the utility company. Prior to the full implementation of the study, we conducted a small pilot study using respondents from two villages in UP during early January 2018. Of the five households in our sample that had a BPL or APL ration card and received an explanation of how to apply for a connection, three of them wanted to apply. By contrast, the one treated household that did not have a ration card was not interested in applying for a connection. This suggests that Saubhagya-eligible households are very likely to take advantage of the scheme.

Preliminary data show that awareness of Saubhagya is still somewhat limited, though. Only one of our ten respondents knew what the scheme was before our intervention. Nevertheless, as the scheme begins to rollout in the rural areas and awareness rises, it is likely to achieve a good deal of success in boosting household electrification rates.

Saubhagya does not directly address the problem of service quality. Most rural households still have far fewer than twenty-four hours of electricity per day, and blackouts are common. This carries the potential to undermine the scheme’s effectiveness, particularly among households that make significant use of illegal katiya connections that siphon electricity from the grid at no cost. Households may perceive little benefit to paying for an unreliable legal connection when they could steal electricity instead.

Nevertheless, if the scheme succeeds in bringing more revenue into the distribution companies—and reducing the amount of loss they incur from electricity theft—utilities will have more incentives and more resources to improve service quality in the future. This would create a virtuous cycle in which consumers would have greater confidence in the utility and greater interest in paying for a legal connection, which in turn would create further capacity and incentive for the utility to improve service.