Ministry of Power launched Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) as one of its flagship programme in March 2005 with an objective to electrify over one lakh un-electrified villages and to provide free electricity connections to 2.34 Crore rural BPL households. This programme has been brought under the ambit of Bharat Nirman.

Under RGGVY, electricity distribution infrastructure is envisaged to establish Rural Electricity Distribution Backbone (REDB) with at least a 33/11KV sub-station, Village Electrification Infrastructure (VEI) with at least a Distribution Transformer in a village or hamlet, and standalone grids with generation where grid supply is not feasible.

Subsidy towards capital expenditure to the tune of 90% will be provided, through Rural Electrification Corporation Limited (REC), which is a nodal agency for implementation of the scheme. Electrification of un-electrified Below Poverty Line (BPL) households will be financed with 100% capital subsidy @ Rs.2200/- per connection in all rural habitations.

Rural Electrification Corporation is the nodal agency for implementation of the scheme. The services of Central Public Sector Undertakings (CPSU) are available to the States for assisting them in the execution of Rural Electrification projects. The Management of Rural Distribution is mandated through franchisees.

So far, Ministry of Power has sanctioned 573 projects for 546 districts to electrify 118,499 villages and to provide free electricity connections to 2.46 Crore BPL rural households. As on 30th June 2010, 81317 villages have been electrified and 117.26 lakh free electricity connections have been released to BPL households. It is targeted to electrify 1 lakh villages and to provide free electricity connections to 175 lakh BPL households by March 2012.