Geopolitics

The Formidable Challenge Of Electrifying Rural India

The current challenge in rural electrification is not just connecting households, but providing sufficient, affordable and high-quality supply.

Installing new electricity lines in Allahabad, India
Installing new electricity lines in Allahabad, India
Sreekumar N and Shantanu Dixit

-Analysis-

The launch of Saubhagya, a new program to supply electricity to all Indian households by the end of 2018, has generated a lot of excitement. The recent announcement by Prime Minister Narendra Modi is perceived as a political commitment at the highest level, an essential condition for advancing the project on the ground.

Of course, announcing ambitious targets and supporting the creation of electricity infrastructure is simply good politics. Our concern is that unless equally enthusiastic efforts are made to address related critical issues, these financial investments and efforts may not result in the desired outcome, of "increased economic activities and jobs, improved quality of life especially for women," as stated in the government press release.

In India, the focus on household electrification started in 2005 with the creation of a rural electricity infrastructure and household electrification program known as the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY), followed by another program, the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY). Hopefully Saubhagya, the current government's new plan, will ride on the momentum created over the last 12 years.

Rural areas still experience up to about four outages per day.

As part of the new program, public agencies are expected to be involved in handling the connections, metering and bill collection, without households needing to apply for a connection individually. It remains to be seen whether this will work better than the unsuccessful franchise option that was experimented with during the RGGVY years.

A separate scheme has been announced for remote areas, with solar powered systems for basic lighting.

Over the years, analysts have raised concerns over the rural electrification program, which must be addressed if Saubhagya is to achieve its objectives. These include issues like the definition of village electrification, doubts over the actual hours of electricity supply, quality monitoring and the failure to develop a franchisee model for rural distribution management.

Past government reports on DDUGJY indicated that there were 13-24 hours of electricity supply to rural areas, but independent monitoring of the supply at consumer locations by the nongovernmental organization Prayas told a different story.

In many states, rural areas still experience up to about four outages per day and have electricity only 60-70% of the time. There have been complaints about metering and billing. Distribution companies do not have the capacity or resources to manage the rural distribution system.

If the electrification drive is to result in well-lit homes, many more steps need to be taken, urgently.

To address these crucial challenges, measures such as transparent participatory reviews at the state level by regulatory commissions need to be an integral part of the efforts to improve rural household electrification.

Rural electrification will become sustainable only if it promotes economic activities, but there is no clear indication of any efforts on this front. If adequate affordable quality supply is not provided, there is a danger of the investment going to waste, as has happened in the past in a few states.

The current challenge in rural electrification is not just providing the connections, but guaranteeing sufficient, affordable, quality supply. If the electrification drive is to result in well-lit homes, many more steps need to be taken, urgently.

There needs to be a public review of the quality of supply by state regulatory commissions supported by third party studies. We need online monitoring of the metering and billing status of newly electrified households to ensure that they continue to get electricity and do not face the prospect of receiving exorbitant bills after long delays, eventually leading to disconnection for non-payment. If economic activities are to be promoted, it is important to provide three-phase supply for non-farm enterprises in villages, and introduce a general category for small consumers who conduct business from their homes. This will avoid potential harassment of households because of unauthorized use of electricity, a serious offense under the Electricity Act 2003.

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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