How are we to determine how much energy poor rural communities need for development? Projections of energy use are generally made by extrapolating past trends in the use of commercial fuels. They rarely take into account the distribution of energy use among different kinds of consumers, or the levels of use that are needed for a healthy and productive existence; and they usually ignore the fuels which are most important in rural areas—wood, crop residues, and dung. While such projections can serve as a rough proxy for a more detailed examination of energy's role in the industrialized countries, where commercial energy use is widespread and per capita consumption is high, it is not of much value in dealing with the problems and needs of poor countries.

India is one of the few countries to have made some preliminary efforts to assess noncommercial fuel use in the Energy Survey published in 1965. But India shares with other poor nations in a significant failing in evaluating energy needs: projections of fuel use do not systematically include the fuel needed to spur growth in agriculture. The consequence is the neglect of the most important energy policy problems of poor countries, which center around the question of how available capital can be invested in the countryside to provide productive employment and a rapid rate of economic growth.

The Indian government's 1965 report on rural electrification excluded many poor people from its calculations from the start. In discussing growth potential for rural electricity use, the report says:

For the purpose of assessment of further demand, landless laborers have not been considered relevant as potential customers, partly because of their low economic status and partly because of the type and conditions of their houses.

This was a self-defeating premise on which to base rural electrification policy. Obviously, when income is low, demand or ability to buy food or