Ministry of Power has introduced the scheme Rajiv Gandhi Grameen Vidhyutikaran ojana (RGGVY) in April 2005, which aims at providing electricity in all villages and habitations in four years and provides access to electricity to all rural 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 .

This infrastructure would cater to the requirements of agriculture and other activities in rural areas including irrigation pumpsets, small and medium industries, khadi and village industries, cold chains, healthcare and education and IT. This would facilitate overall rural development, employment generation and poverty alleviation .

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.1500/- per connection in all rural habitations .

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