Rural electrification is one of top items on the development agenda for the government of India. Although rural electrification continues under the Rajiv Gandhi Rural Electrification Programme that began in 2005 and the government celebrates its accomplishment of electrifying one lakh (100,000) villages, there are serious challenges ahead. This paper, based on our survey in rural Bihar, reveals that the progress of rural electrification may not be as advanced as government statistics indicate. Many villages became de-electrified in the past when inadequate government-provided transformers failed due to insufficient capacity. Some villages were fortunate and have been re-electrified, but many have been left un-electrified; simply waiting for the government to help has proved to be an ineffective solution. This paper also reports on the issue of illegal connections. Power theft has become rampant in rural areas. As rural electrification progresses, access to electricity is easier than before. Governance is weak in rural areas, so there is virtually no checking and monitoring system for electricity use. These factors motivate some villagers to access electricity illegally. The government’s program to provide electricity to all the villages and all the households in rural areas should not be slowed, but side effects such as illegal connections should be taken more seriously. If not, it will make rural electrification unsustainable as it will become another serious burden to India’s power sector, which has been running at a loss for decades.