Tackling Rural Energy in India: An Institutional Way Forward

India's rural per capita energy consumption is only one-fourth that of its urban. The state controlled energy institutional arrangement has allowed its participants to indulge their perverse incentives for long, creating significant mismatch between supply and need, with rural populations bearing the brunt. Environmental challenges make it imperative to shift to cleaner and efficient energy. This paper suggests an institutional way forward to enhance rural energy access while addressing environmental concerns. It requires that the rural consumers be vested with appropriate property rights to manage their energy such that their incentives are compatible with social efficient energy use.