NEW DELHI • Prime Minister Narendra Modi has vowed that every home in India will have electricity by December next year, launching a US$2.5 billion (S$3.4 billion) project as he moves to shore up voter support amid doubts over his handling of the economy.

The initiative announced on Monday would see the country's 40 million households without electricity linked up to power for free.

"Forty million of the total 250 million households still don't have power, which means 25 per cent of people are living in the 18th century. The government will electrify every household, whether it's in a village, city or a remote region," Mr Modi said in a speech.

"No fee will be charged for electricity connection in households of poor citizens," Mr Modi said.

The latest government data suggests that fewer than 3,000 villages are still waiting for a power supply.

Mr Modi has repeatedly linked similar initiatives, such as his 2015 promise to bring power to 18,452 villages without electricity, to the Indian government's concern for the welfare of the poor.

The announcement comes amid concerns over a slowing economy, which has led the government to consider measures to boost growth.

Recent economic trends have been worrying, with official statistics showing India's growth slowed to 5.7 per cent in the first quarter.

Many economists have linked this to the cancellation of more than 80 per cent of banknotes in November last year and the introduction of a national goods and services tax in July.

Mr Modi stormed to power in 2014 with popular promises such as job creation and electricity for all and will be tested on the pledges in 2019, when he faces re-election.

"Power for all is a very ambitious plan and the Prime Minister knows the political gains it can bring if he can pull it off," said Dr Sandeep Shastri, a political analyst and a pro-vice-chancellor at Jain University in Bengaluru.

"So, when he announces schemes to connect all households, beyond a shadow of doubt he has the 2019 elections in mind."

Nearly 304 million Indians don't have access to electricity, accounting for about a quarter of the global population living without power, according to Niti Aayog, a government think-tank.

Several of these are in rural areas, where state power retailers are reluctant to supply electricity as returns fall below the investment made in infrastructure.

The plan will be funded by a mix of federal government grants, investment by state utilities and loans, according to a statement.

The project also aims to cut use of kerosene, the government said.

Per capita electricity consumption in the world's fastest-growing major economy is barely one-third of the global average.

REUTERS, AGENCE FRANCE-PRESSE, BLOOMBERG