The solution really is that power need not be distributed at all. Power can be generated in distributed locations just as the Kabbigere example above demonstrates. However, this requires many considerations as well. For example, we found that Biomass gassification is not feasible always as it requires a constant supply of woody biomass. When demand is created in a village for biomass, the costs for the previously-considered-as-waste biomass suddenly increases. So, unless the biomass gassifier is maintained by the village people themselves, it is difficult to operate one profitably. This is the main reason, most biomass gassifiers are run by village panchayats/communities. The biomass gassifiers at West Bengal run by village people has in fact changed the quality of life of the people living there.
It is not just biomass. Solar thermal is appropriate for areas that receive a lot of sunlight which is quite normal in much of the country. Methanification of urban waste is another source of energy.
If only the government ever considers distributed power as much as it should instead of working on uncertain energy sources such as nuclear, it would be possible for a India without constant power-cuts.