Electricity is one of the main determinants of the quality of life. In India, the power sector has not kept pace with the growth in demand resulting in serious energy shortages. About 70 per cent of the rural households are yet to get electricity connections and power-based economic activities in the electrified villages are minimal. Out of the estimated 80,000 villages yet to be electrified, the Tenth Plan proposes to electrify 62,000 villages through grid supply. The balance 18,000 remote villages are proposed to be electrified by 2011-12 through the use of decentralised non-conventional sources of energy. Uneconomic tariffs charged from the priority sectors, lower slabs of domestic consumption, high transmission and distribution losses (T&D losses), which often disguise large-scale theft, and low billing and collection efficiency are the important problems affecting the performance of electricity sector in India. Among all these problems, T&D loss is the major one, which is directly related to the functioning of the sector.