Collectively, Indian rural villages has potential to generate few mega watts of power. However, we see only few biomass projects, including the planned ones, we end up with 1000 MW of biomass power. When properly planned, these biomass projects could generate ample employment could sustain rural economy. One reason for failure is stupid policies in procurement of power by the state grid. A 10 MW biomass power plant will approximately cost Rs.500 – 600 million. Governments which spends huge amount for empowering villages can resort to setting up of renewable projects. This will also helps in reducing transmission losses and could power surrounding smaller industrial units. Planners have to think in these lines and provide a policy framework for action