United States Agency of International Development
Involvement Goals and Summary
While there are various foreign governments that provide development aide to India and play some role in Indian rural electrification, this paper will focus on the role of The United States Agency of International Development, USAID, in Indian rural electrification as the United States is India's largest trading partner and a significant donor of aid to the nation (US Department of State). USAID has a department dedicated specifically to development in India. Their stated goal is to work with India to help them reach their development goal of halving poverty by 2015 (USAID India). But “poverty, rapid population growth, pockets of weak governance and poor health systems” are viewed by USAID to “continue to pose serious challenges to India,”so their projects are mainly dedicated to addressing those issues and not towards increasing rural electrification (USAID India).
However they recognize that “reliable supplies of clean energy and water advance and sustain economic growth and social development” so they have programs focusing on energy issues. These programs are mainly dedicated to energy policy and pricing reform in order to maximize the current infrastructure use in cities as well as reducing energy use of irrigation pumping which is estimated at 30% of total Indian electricity use (USAID India).
The World Bank estimates that India currently wastes $5 billion each year in its power sector, so USAID has put a priority on making programs to cut down on electrical waste and save the Indian government and economy large sums of money. Thus these programs result in increased electrical efficiency in their target areas of cities and farms near cities and currently existing infrastructure, thereby increasing grid reliability, reducing energy waste, reducing the need of governmental bailouts of the utilities and increasing governmental fiscal stability.
While USAID has not put significant focus on increasing rural electrification, they have worked to disseminate best practices in rural electrification projects by establishing a collaborative partnership between the U.S. Rural Utilities Service and India's Rural Electrification Corporation called Distribution Reform, Upgrades & Management (DRUM). DRUM's stated goal is to “introduce strategic planning, design and alternative financing concepts to advance electric power distribution reforms in India.”
However, the Indian Ministry of Power has decided to focus DRUM's efforts on four states, none of which are one of the five most energy poor states described earlier. DRUM seeks to achieve its goals by “structuring and executing training activities in regionally targeted areas to deliver high impact distribution reform training through 15 to 20 top-notch Indian institutions dispersed throughout the country” (DRUM).
The two major objectives of the DRUM Training Program are to “enhance the knowledge and capabilities of a significant number (20,000 - 25,000) of distribution engineers, managers and technicians through the facilitation of technical and managerial training delivered by professional Indian training institutions” as well as “[s]upport the development and institutional capacity enhancement of the selected Indian institutions for sustainable delivery of distribution business management, reform and regulation training,” (DRUM).
Critique of USAID Projects
While USAID and DRUM focus on electrical issues in India, they do not focus directly on bringing electricity to rural villages so their effect on rural electrification is difficult to determine. However, by providing training for thousands of Indians for technical and managerial positions in the field of rural electrification, the knowledge base and amount of necessary human capital will drastically increase. Their efforts to save the Indian energy sector billions of dollars through increased efficiency may free up capital to be dedicated to rural electrification schemes, or the new savings can be kept as profits. The efforts of USAID do not necessarily guarantee better access to electricity for India's rural populations, but it does increase the profitably of current electrical programs and increase the number of skilled workers in the field of rural electrification. This may result in new attention being given to rural electrification, but this is not a given. USAID could fix this by only offering their aid to organizations that will use a portion of the money saved to rural electrification projects.
While USAID may act as a proxy for other foreign governmental organizations and the work they do to improve rural electrification in India, its size, structure, goals, and resources are very different from that of nongovernmental organizations so their activities in this field merit independent analysis.
"DRUM (Distribution Reform Upgrades and Management Project).
"Power industry business information. Web. 19 Nov. 2009.
"USAID India : Our Work - Strategic Objective 4 - Energy and Environment."
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"India." U.S. Department of State. Nov. 09. Web. 05 Jan. 2010.