Surya Ghar Muft Bijli Yojana

Surya Ghar Muft Bijli Yojana


Recently, the Prime Minister announced the Surya Ghar Muft Bijli Yojana.

GS-02 (Government policies and interventions)

Surya Ghar Muft Bijli Yojana:

  • It is a rooftop solar scheme for free electricity.
  • The scheme aims to light up 1 crore households by providing up to 300 units of free electricity every month.
  • The central government aims to give substantive subsidies, which will be given directly to people’s bank accounts, and heavily concessional bank loans to reduce the cost burden on people.
  • Stakeholders from all sectors will be integrated into a National Online Portal.
  • Urban Local Bodies and Panchayats shall be incentivised to promote rooftop solar systems in their jurisdictions just so penetration occurs at the grassroot levels.
  • The scheme is expected to generate more income, lower power bills and provide employment for people.



  • A subsidy or government incentive is a type of government expenditure for individuals and households, as well as businesses with the aim of stabilizing the economy.

Cost of Subsidies:

  • Subsidies are financed by taxpayer money.
  • These are the funds that could otherwise be allocated to developmental projects such as infrastructure, transportation, and energy.
  • Increased spending on subsidies leads to higher taxes, reduced government spending on developmental projects.
  • It sometimes can be inflationary due to excessive currency printing.

Impact on Economy:

  • It reduces people’s purchasing power as it increases taxes.
  • It also leads to decreased consumer spending and overall demand in the country, which in turn affects GDP growth rates.
  • Reduced government spending results in lower efficiency and productivity within the economy that further impacts GDP growth negatively.

Acceptance of Subsidies:

  • Despite the negative effects, voters often accept governments that offer subsidies as the immediate damage is not always visible, akin to the situation of a child of disturbed parents exhibiting behavioral issues.
  • Subsidies should ideally benefit the needy.
  • Subsidizing essential commodities like diesel, kerosene, and LPG for the poor while ensuring those who can afford it pay market prices is advisable.

Other related Initiatives:

  • National Solar Mission
  • Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM)
  • SRISTI Scheme
  • Solar Park Scheme
  • Rooftop Solar Scheme
  • International Solar Alliance