(a) whether the Government propose to provide soft loan to State Governments for
electrification of thousands of villages in the country during the Tenth Five Year Plan;
(b) if so, the details thereof;
(c) whether the Central Government have decided to give subsidy on the interest also;
and
(d) if so, the details thereof?
THE MINISTER OF STATE IN THE MINISTRY OF POWER( SHRIMATI JAYAWANTI MEHTA )
(a) & (b) : In order to facilitate the acceleration of the pace of electrification of
villages, hamlets and dalit bastis and to supplements the resources of the States for this
purpose, Rural Electrification Corporation (REC) recently introduced new scheme for
providing loan assistance to the State Governments on concessional interest rate varying
from 1 to 3% per annum (1% for dalit bastis and 3% for hamlets and village
electrification schemes). The unique feature of these new schemes is that if they are
successfully and fully implemented within the stipulated time, then even this interest
would be waived and refunded to the borrower in which event the schemes would
become interest-free. Under this programme, REC has decided to earmark Rs.500 crore
annually during the Tenth Plan period.
(c) & (d) : Government contemplates to provide 4% interest subsidy under proposed
Accelerated Rural Electricity Programme (AREP) for loans to be taken by the State
Governments for rural electrification for unelectrified villages including dalit bastis. If
the progress of complete village electrification is satisfactory, the scheme may be
extended to cover electrification of all hamlets and households. Rural Electrification
would be through Conventional as well as Non-Conventional Energy Sources. The
interest subsidy would be granted on the Net Present Value (NPV) basis after
disbursement of loans.