(Reuters) - India will spend 253 billion rupees ($4.1 billion) to tackle rampant theft of electricity by rolling out metering in cities and upgrading old distribution networks, the power ministry said late on Thursday.

Cutting electricity theft and reducing transmission losses are part of Prime Minister Narendra Modi's efforts to bring uninterrupted power to the whole country, a key policy plank since his election in May.

Cheap or free power is viewed as a right rather than a privilege by many Indians, and poor policing and antiquated transmission lines result in as much as 40 percent of electricity going unpaid for in some Indian states.

As chief minister of Gujarat in 2005, Modi was credited with tackling power shortages by clamping down on theft, and by repairing the finances of local distribution companies hit hard by unpaid bills.

Under the scheme, the government will roll out meters on distribution transformers, feeders and consumers in urban areas, the power ministry said in a statement, following cabinet approval of the project.

The government will also strengthen sub-transmission and distribution networks.

These projects will help cut technical and commercial losses and improve collection efficiency, the ministry said. They will cost 326 billion rupees in total, of which 253 billion will come from the government.