This report provides a background of the rural energy scenario in India, describing the unmet energy needs, and the policies and regulatory environment as a rationale for the VESP (Village Energy Security Programme). It discusses the program design, its key components, and a detailed analysis of its pilot phase performance on institutional, technical, financial, managerial and social aspects, ending with lessons learned. The report ends with a chapter on the important lessons with policy and program level recommendations as the way forward for improving the outcomes of decentralized rural energy initiatives in the future.