1. INTRODUCTION

The improvement in quality of life and poverty alleviation of
rural poor requires sustainable rural energy supply at reasonable cost. Even with subsidy, the majority of rura l population can’t afford the use of energy to improve the quality of life . World over it has been recognized that the energy for the basic needs plus is required for sustainable development of rural are a s. This plus or extra is creating and providing opportunities to increase the income of rural population. Thus there is a need for developing, planning and implementing integrated rural development and energy programs to cater to the needs of rural population. The prog ram must simultaneously address the energy requirements for income generating activities and other needs such as energy for water supply, health facility, and domestic purposes.

2. RURAL DEVELOPMENT – NEW APPROACH
The new approach needs to be considered in order to cope
with the problems observed and encountered in sustainable
rural electrification in developing countries. This appro a c h
needs to be based on a rural energy strategy whose objective is to guarantee the supply of energy for the rural population, in a sustainable and timely manner, to help improve rura l people’s quality of life and to foster economic development of the locals by increasing the opportunity for income generation. This requires integrated planning and implementation of rural electrification (RE) programs and other rural development (RD) programs. The rural development programs must include programs, which would help the rural lot economically. Rural electrification should be considered an integral part of country development plans and strategies. The objectives should be:

· Integration of the rural sectors to the national economic
development

· To increase the opportunities for generating revenues using production technologies powered by electricity

· To improve rural populations’ cultural patterns

Due to the particularity of each case, and the different situations inside each region of the country, the decisions around these matters need to be made with active participation of the local governments and consumers organizations.

3. NEW POLICY AND STRATEGY FOR RURAL DEVELOPMENT
The policy for rural electrification needs to ensure the following:
· Maintain the decision making process decentralized, in consistency with the development plans in each district or region

· Widen the technological alternatives of the rural electrification, considering the local conditions and resources, and

· Strengthen co-financing mechanisms in that the investments are materialized with the contribution of the state, the electric service companies and the users. On the way of materializing the process of rura l electrification, the program need to include a planning and
administration model that should be adopted in adequately in local level. Cost recovery is probably the single most important factor determining the long-term effectiveness of rural electrification programs albeit any other rural service such as water. When cost recovery is pursued, most of the other program elements fall easily into place. All the successful programs place a strong emphasis on covering their costs, though there is a wide variation in how it can be approached.

Where the rural energy program depends on the availability of grant funds from donors, progress has been slow and intermittent. The state electricity boards flatly state that it has no interest in rural electrification, because electricity prices, by government order, are too low to cover eve n operating costs. The designing of a rational system of cost re c overy is of great importance. The tariff regime should ensure that RE programs are financially sustainable and will
not drain operational resourc e s. The tariff structure needs to ensure that any subsidies are fair, equitable, and sustainable. Successful subsidy programs encourage the rural electrification business. When people are very poor and provision of electricity is
so expensive that rural households cannot afford it, rural electrification subsidies will be required for the time being. However, the subsidies are also provided for other rura l services run by different government controlled agencies. Thus the overhead costs for each and every rural service is very high and as the scale of operation is low, the cost of providing service per person remains very high in rural areas.
Therefore, in order to control the cost for providing services, integrated planning requires abolishing of multi-agency system for providing rural services. This must be replaced with single agency system, which handles all the RD and RE programs. Only then can there be synchronization of the programs. The integrated rural planning strategy must focus on sustainability, local community participation in project development and implementation, the use of local resources, training and employing local hands, follow up and evaluation activities, and the ultimate goal of creating a culture for commercialization of rural services. In order to implement this type of strategy, several critical factors need to be take n into consideration, including cultural, social, political, economic, environmental and technological. Stemming from this strategy, a plan of action with four stages needs to be considered. In the first stage a diagnostic needs to be made, with the goal of identifying opportunities for productive activities and for application of renewable energies; evaluation of local resources, planning future activities, selection of pilot projects, identification of barriers to projects and assuring financing for the next stages. The second stage includesthe implementation of a number of pilot or demonstration projects. In the third stage, coverage of activities would be expanded to a number of other communities within the country. In the final stage the program would be consolidated and
expanded to the whole country. The strategy must never ignore the role of private players in providing rural services commercially in the long run. Thus the government must create political, legal and regulatory environment by setting up rural services regulatory commissions (RSRCs) and formulating transparent subsidy schemes with a caveat that the subsidy would be tapered off over a specified time period. The subsidy must be provided to private players commensurate to the rural service provided by them through open bidding to be administered by RSRCs. The bidding should include the approach to be adopted by the service providers in improving and creating income generation opportunities for the rural masses. The subsidy bidders must provide an outline for the rural programs in their bidding and how they plan to create the income generation opportunities. The planning of the programs must be with rural consumer participation. Even the rural community must have representation on RSRCs. The constitution of RSRCs should be in consultation with local governments and must have representations from the technical, financial, planning and management experts besides rural
consumers. It has become clear that electricity does not contribute much to the development of target communities if it is delivered to
isolated areas in an isolated manner. It is important to promote and encourage the productive use of electricity while the distribution systems are being implemented. Furthermore, it is important to keep in mind that electricity is only one of the many important factors in rural development, and that it will contribute effectively to rural development only if its delivery is bundled with that of other infrastructure services. It is a well-known fact that energy is a vital input for sustainable development leading to poverty alleviation through increased opportunity for income generation and on the other hand the sustainability of energy access is dependent on paying c apacity of rural consumers. Thus the rural energy programs and rural development programs are inter-dependent. The availability of safe and reliable energy helps in achieving theobjectives of rural development programs aimed at poverty alleviation and the success of rural development programs
helps in poverty alleviation, which makes purchase of energy a fford able to rural poor.

4. BARRIERS AND SOLUTIONS TO INTEGRATION OF RURAL ENERGY AND DEVELOPMENT PROGRAMS
Co-investments in priority community services and economically productive activities are essential for sustainable d evelopment. All developmental programs listed below need safe and reliable energy supply:

· education for children, women and adult;
· drinking water;
· water for agriculture;
· rural industries which can employ rural population;
· rural cottage industries;
· health facilities, etc.;

However, there are barriers to integration of rural energy and
rural development programs, which are as below:

· Lack of institutional set-up for integrating rural energy and rural development programs;
· Separate ministries for rural energy and rural development;
· No coordination between ministry of energy/power and ministry of rural development;
· The design of rural energy and rural development programs/ projects are not sustainable;
· No consumer participation in planning and implementing rural energy and rural development programs/ projects;
· Lack of finance;
· The planning and implementation of rural energy and rural development programs/projects is done with the aim to satisfy large number of rural population, which does not have any (or very little) impact on rural poverty alleviation. These are as follows:

The possible solutions to overcome barriers to integration of rural energy and rural development programs are as below:
· Ministry of rural development should also address rural energy and integrate rural energy and rural development programs;
· Capacity building skills development for planning and implementing integrated rural energy and development programs;
· Decentralized planning for integrated rural energy and rural development programs;
· Participation of local groups (and NGOs) in planning, implementing, and monitoring integrated rural energy and rural development programs;
· Rural energy and rural development programs must be taken up in a large enough area so that they are cost effective in setting up initially but also in providing regular after sales services;
· Integrated programs must cover all aspects of development (including reliable energy access) so that they are sustainable;
· Planning and implementation of integrated rural energy and rural development programs/projects must aim at utilizing local man-power after providing them proper training for imparting/upgrading their skills;
· Limited financial resources may be used to cre a t e sustainable nucleus regions at several places during the initial phase and in subsequent phases areas around these nuclei may be taken up along with creating more nucleus.

5. CASE EXAMPLE - CARD (CIRDAP APPROACH TO RURAL DEVELOPMENT)
The Centre on Integrated Rural Development for Asia and the Pa c i fic (CIRDAP http://www.cird ap.org.sg) has come out with CARD methodology for village tra n s formation. This has been given in pictori a l format on next page. It has five phases with ultimate goal of leap in village economy. All the rural development programs are planned in isolation and there is no coordination among the i m p l e m e n t i n g a g e n c i e s . I n f a c t , m o s t r u r a l development programs are per se multi-facetted, and implementing agencies often are hesitant to add another component to an already complex program. It may be noted that, while extra activities have to be taken up, they complement and strengthen ong o i n g a c t i v i t i e s a n d e x i s t i n g i m p l e m e n t a t i o n structures can be used. Thus there is a need for unitary agency to take up all the rural development programs. Care has to be take n , howe ver, that the activities are well integrated into the whole rural system and the right measure of technical support is organized and responsibilities are clearly defined. Such setup would help in privatization efforts. The single-agency concept would help in reducing the administra t i ve cost for providing rural serv i c e s. Further, it will be easier to privatize as and wh e n such a decision is take n . This type of set-up would
help in employing the local hands after due training. This aspect shall be dealt later. Howe ver, such an approach would create an opportunity for more local employments leading to poverty alleviation.