Achievements and challenges of energy poverty alleviation policies: Evidence from the select states in India

• Published date: 01 February 2023
• Author: Rajesh H. Acharya,Anver C. Sadath
• Date: 01 February 2023
• DOI: http://doi.org/10.1002/pa.2839

RESEARCH ARTICLE

Achievements and challenges of energy poverty alleviation

policies: Evidence from the select states in India

Rajesh H. Acharya

1

| Anver C. Sadath

2

1

School of Management, National Institute of

Technology Karnataka, Surathkal, Karnataka,

India

2

Department of Economics, Central University

of Kerala, Kasargod, Kerala, India

Correspondence

Rajesh H. Acharya, School of Management,

National Institute of Technology Karnataka,

Surathkal, Karnataka, India.

Email: rajeshacharyah@gmail.com

Indian energy sector has undergone a tremendous transformation with consistent

government policy interventions since 2000. Against this backdrop, we examine the

extent to which energy poverty has decreased due to the expansion of energy ser-

vices and the significant determinants of energy poverty in select six states in India.

Overall, results reveal that absolute multidimensional energy poverty has substan-

tially decreased across all states examined in the study as well as across all income

and social groups between 2015 and 2018. Specifically, acute multidimensional

energy poverty has reduced by an average of 30% between 2015 and 2018 in six

states. At the same time, dependency on biomass remains more or less the same

between 2015 and 2018. Results also show that inequality in the access to energy

across income and social groups exists, and education is negatively related to energy

poverty. Energy poverty has declined by a similar percentage among most employ-

ment groups, except for people practicing cattle rearing. Finally, culture is a signifi-

cant determinant of energy poverty as households with the elderly and more land

owned have higher energy poverty, probably due to the easy access to biomass and

preference of such households to use it.

KEYWORDS

capability, energy poverty, multidimensional energy poverty index, multinomial logistic

regression

1|INTRODUCTION

Eradication of energy poverty has vital developmental implications

(Fang & Chang, 2016; Khandker et al., 2012a; Pachauri et al., 2004;

Parikh et al., 2012;Pereiraetal.,2011). The provision of electricity and

clean cooking is essential for uplifting the poor, empowering women,

and expanding the education of children and girls in particular

(Khandker et al., 2014;Phoumin&Kimura,2019; Sagar, 2005;

Szakonyi & Urpelainen, 2015). For example, evidence shows that

access to electricityand clean cooking at home has a positive influence

on the educationalachievements of children, saves women fromhealth

hazards caused by the use of biomass for cooking, and even reduces

malnutrition (Barnes et al., 2011;Sambodo&Novandra,2019; Teariki

et al., 2020). Electricity is crucial for rural development with medical

services and improves the productivity of agriculture and rural

industry (Barnes& Binswanger, 1986; Cabraal et al., 2005; Cook, 2011;

Mathur et al., 2006). The availability of clean cooking fuel frees girls

from the burden of collecting firewood in the traditional families. It

enables themto focus more on their education andeven protects them

from risks associated with collecting firewood as well as women from

work-related risks (Spagnoletti & O'Callaghan, 2013;Szakonyi&

Urpelainen,2015). Lack of access to cleaner energyis, thus, a gendered

problem also, with women bearing the brunt without being able to

defend themselves due to existing socio-economic discrimination in

third-worldcountries (Moniruzzaman & Day,2020;Robinson,2019).

In this paper, therefore, we reassess the extent and intensity of

energy poverty in India in the light of major initiatives to expand

access to modern energy services and examine the determinants of

energy poverty in India. Thus, the paper updates the latest develop-

ments in the energy sector in India and related literature relative to

the work of Sadath and Acharya (2017). This paper improves the

understanding of energy poverty in India over existing studies and

Received: 25 September 2021 Revised: 22 July 2022 Accepted: 23 July 2022

DOI: 10.1002/pa.2839

J Public Affairs. 2023;23:e2839. wileyonlinelibrary.com/journal/pa © 2022 John Wiley & Sons Ltd. 1of18

https://doi.org/10.1002/pa.2839

contributes to the literature in several ways. First, recent studies such

as Gupta et al. (2020) and Nathan and Hari (2020) have used National

Sample Survey (NSS) 2011–12 (68th round) data, which is outdated.

As explained above, India witnessed major developments in the

energy sector post-2010, and hence studies using the 68th round of

NSSO data (2011–12) cannot capture the implications of such pro-

grams. Further, NSSO data provides information on the quantity con-

sumed and expenditure incurred on various products, including

energy services. However, it does not state for what purpose a partic-

ular fuel is used. For example, a fuel like kerosene may be used for

cooking or lighting or running appliances like irrigation pump sets. Fur-

ther, a household may use the cleaner and dirty fuel for the same

activity, like cooking, lighting, and so forth. But the survey records the

primary fuel used for the purpose, which precludes the analysis of

energy stacking. Though the NSSO gives information on various

expenditures at the all-India level, it falls short of providing a compre-

hensive idea regarding the household energy scenario. Therefore, a

survey, like Harvard energy access data (Mani et al., 2018), explicitly

designed to cover the household energy scenario can unravel the sub-

tle issues in the energy sector.

There is no universally acceptable definition of energy deprivation

on account of the limitations of various approaches involved while

defining energy deprivation (Srivastava et al., 2012). Several factors

such as affordability, accessibility, reliability of services, efficiency, cul-

ture, norms, gender, and climate are crucial for conceptualizing energy

deprivation (Betto et al., 2020; Bouzarovski & Petrova, 2015;

Ntaintasis et al., 2019; Papada & Kaliampakos, 2018).

The employment of capability approach to examine energy poverty

discourse has many distinct advantages over traditional methods. First, it

is universally recognized that access to reliable and affordable energy ser-

vicesactsasameanstocrucialendsorfunctionings,suchasbeing

healthy, being literate, and so forth, and hence, enhances capabilities

(Barnes et al., 2011;Nadimi&Tokimatsu,2018; Parikh et al., 2012). This

dimension that access to energy enhances functionings, thus, takes care

of the personal conversion factor- one of the three major conversion

factors to achieve being or doings (Robeyns, 2005). Second, as Day et al.

(2016) pointed out, this approach to energy deprivation can be fairly

applied in the context of both global north and south and, hence,

addresses the environmental conversion factor. Third, the capability

(freedom) to translate the affordability or accessibility to energy services

into, what Sen called, valued functionings depends upon social and

economic circumstances (Churchill & Smyth, 2020; Khandker et al.,

2012a; Middlemiss et al., 2019;Sen,2000;Van Gevelt,2014). For exam-

ple, the provision of electricity will not increase women's labor market

participation, as revealed by the literature (see, e.g., Dinkelman, 2011;

Jimenez, 2017), if women are not allowed to go out for work in a conser-

vative society. Thus, the third dimension also takes care of the remaining

conversion factor, namely the social conversion factor.

The capability approach, therefore, would be better suited to

capture such elusive instances and thereby insulate the analysis from

the limitations of the traditional approaches.

The Government of India has introduced several policies and pro-

grams in the Indian energy sector to expand access to modern energy

services. For example, the Electricity Act (2003)

1

is a significant policy

framework to reform the electricity sector and enhance efficiency by

creating an electricity market and thereby encouraging competition.

The Electricity Act (2003) also envisioned consolidating various laws

pertaining to the generation, transmission, distribution and penetra-

tion of electricity to rural areas, which was deemed a major govern-

ment obligation. Subsequently, under the Electricity Act 2003, the

Indian government announced the National Electricity Policy, 2005,

2

and Rural Electrification Policy, 2006,

3

which also stressed the impor-

tance of access to electricity, especially in rural areas, promoting com-

petition and addressing structural anomalies in the generation,

transmission, and distribution. Accordingly, the Union Government

launched an ambitious scheme “Rajiv Gandhi Grameen Vidhyutikaran

Yojana (RGGVY)”in 2005 to electrify all un-electrified villages/

hamlets and provide access to electricity to all households in the

next 5 years. Lack of coordination between union and state govern-

ments was also responsible for want of progress in the electrification

in India. Accordingly, under Electricity Act 2003 and Rural Electrifica-

tion Policy, 2006, the Government of India also laid down strategies

to expand electricity to all areas under RGGVY with the active

support and coordination with state governments (Palit &

Bandyopadhyay, 2017).

Then, the Government of India announced Deen Dayal Upad-

hyaya Gram Jyoti Yojana (DDUGY)

4

in 2014, subsuming RGGVY with

the target of complete electrification of all un-electrified villages by

May 2018. The DDUGY also proposed the separation of agriculture

and non-agriculture feeders to facilitate judicious supply to agricul-

tural and non-agriculture consumers in rural areas. This was followed

by the launching of Ujwal Discom Assurance Yojna (UDAY) in 2015 to

bail out financially bleeding state electricity distribution companies

(DISCOMS), thereby reforming the power sector. Thus, state govern-

ments will take over 75% of the accumulated debt of the respective

DISCOMS. Then the government will issue UDAY bonds to financial

institutions to raise money to pay off the debts of the DISCOMS. The

remaining debt of DISCOMS will be either converted into debt with a

lower interest rate or funded by money raised through DISCOM

bonds backed by the state guarantee. State DISCOMS, in return, are

bound to improve their operational efficiency by fixing transmission

loss, power theft, and faulty metering. According to IEA (2020), by

March 2017, 27 states had entered into memorandums of under-

standing with the union government for the UDAY scheme. The

government's intervention through the UDAY scheme was highly

significant in ensuring 24 7 reliable and efficient power supply for

all by improving the financial and operational efficiency of state

DISCOMS. Despite several initiatives since 2000 to take electricity to

all households, several million households remained un-electrified. To

address it, the government of India launched the Saubhagya scheme

5

1

See Electricity Act, 2003 at http://www.cercind.gov.in/act-with-amendment.pdf.

2

See National Electricity Policy, 2005 at https://powermin.nic.in/en/content/national-

electricity-policy.

3

See Rural Electrification Policy, 2006 at http://www.cercind.gov.in/2018/whatsnew/

REP.pdf.

4

See details at http://www.ddugjy.gov.in/.

5

See more details at https://saubhagya.gov.in/.

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