GS Paper: GS3

Why in the News?

The Sustainable Harnessing and Advancing Nuclear Energy for Transitioning India (SHANTI) Bill, 2025 was passed by Parliament, replacing two foundational laws, the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010. This marks the first comprehensive overhaul of India’s nuclear power regime since independence. 

Introduction

India’s nuclear energy sector has historically been characterised by exclusive state control, rigid liability provisions, and limited regulatory autonomy. While these safeguards prioritised safety, they also constrained capacity expansion, foreign collaboration, and private investment. The SHANTI BILL is significant as India targets 100 GW of nuclear capacity by 2047, compared to the present capacity of around 7.5 GW. This highlights a sharp departure from the earlier state-monopoly and supplier-deterrent framework.

Why was the overhaul needed?

1. Outdated legal framework: The Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010 were misaligned with current energy demands, global best practices, and advanced reactor technologies.
2. Investment deterrence: Unlimited and ambiguous supplier liability under the 2010 law discouraged private and foreign participation, slowing capacity addition.
3. Low capacity growth: Nuclear capacity stagnated at ~7.5 GW despite long-term targets, reflecting structural bottlenecks rather than technological limits.
4. Energy transition pressures: Rising electricity demand and climate commitments required reliable, non-fossil baseload power beyond renewables.
5. Regulatory concerns: Lack of statutory backing for the nuclear regulator raised issues of autonomy, credibility, and public trust.

Structural Reset of the Nuclear Power Framework

Legislative Consolidation and Policy Shift

1. Replacement of legacy laws: Repeals the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010.
2. Unified governance framework: Integrates safety regulation, liability norms, and sectoral participation within a single statute.
3. Transition objective: Aligns nuclear expansion with India’s energy transition and net-zero commitments.

Opening the Nuclear Sector to Private Participation

Expansion of Eligible Operators

1. Private sector entry: Allows private entities to own and operate nuclear power plants for the first time.
2. Scope of activities: Covers construction, transport, storage, import, export, and handling of nuclear material.
3. Mandatory authorisation: Requires Atomic Energy Regulatory Board (AERB) approval for all nuclear-related activities.

Continued Strategic Control

1. Exclusive central control: Retains government monopoly over enrichment, isotope separation, spent fuel reprocessing, and radioactive waste management.
2. Security prioritisation: Prevents dilution of national security oversight over sensitive nuclear processes.

Recalibration of Nuclear Liability Architecture

Graded Liability Caps

1. Capacity-linked liability: Introduces differential liability based on reactor size.
2. Liability limits (₹ crore):
   1. Above 3600 MW: 3000
   2. 150-3600 MW: 1500
   3. 750-1500 MW: 750
   4. 150-750 MW: 300
   5. Below 150 MW and fuel processing units: 100
3. Policy outcome: Improves investor certainty while retaining operator accountability.

Supplier Liability Reconfiguration

1. Removal of “supplier” clause: Eliminates direct supplier liability from the statutory framework.
2. Contractual recourse: Permits operators to seek compensation from suppliers only through contractual agreements.
3. Investment impact: Addresses a key deterrent that previously discouraged foreign reactor suppliers.

Redefining Compensation and Accountability

Right of Recourse Rationalisation

1. Conditional applicability: Applies only where nuclear damage results from defective equipment or services.
2. Exclusion of operational accidents: Shields suppliers from liability arising from operational lapses.

Financial Security Mechanisms

1. Insurance mandate: Requires operators to maintain insurance or financial security only up to the prescribed liability cap.
2. State-owned exemptions: Exempts installations owned by the Union government from mandatory financial security.

Strengthening Regulatory Autonomy and Oversight

Statutory Empowerment of AERB

1. Legal status: Grants statutory authority to the Atomic Energy Regulatory Board.
2. Expanded mandate: Covers safety regulation, licensing, and enforcement across nuclear installations.
3. Institutional clarity: Addresses long-standing concerns over regulatory dependence on the executive.

Audit and Accountability Framework

1. CAG oversight: Places AERB’s expenditure under the Comptroller and Auditor General.
2. Reporting structure: Requires AERB reports to be tabled before the Atomic Energy Commission.
3. Governance outcome: Enhances transparency without compromising operational independence.

Penal Provisions and Enforcement

1. Monetary penalties: Introduces fines for severe safety violations.
2. Graded punishment: Differentiates between minor and grave offences.
3. Earlier gap addressed: Fills the absence of monetary penalties in the previous liability regime.

Nuclear Damage Claims and Grievance Redressal

1. Dedicated commission: Establishes a Nuclear Damage Claims Commission.
2. Adjudicatory mechanism: Enables compensation claims beyond the operator liability framework.
3. Appeal provision: Allows appeals to the Electricity Appellate Tribunal.

Conclusion

The SHANTI Bill, 2025 marks a shift towards a regulated and investment-friendly nuclear energy framework while retaining strong state control over safety and strategic functions. By reforming liability norms and strengthening regulatory oversight, it seeks to remove structural constraints on nuclear expansion. Its success will depend on effective regulation, transparency, and sustained public confidence as nuclear power grows in India’s energy mix.

PYQ Relevance

[UPSC 2018] With growing energy needs should India keep on expanding its nuclear energy programme? Discuss the facts and fears associated with nuclear energy. 

Linkage: The SHANTI Bill addresses the fears highlighted in the question, especially safety, liability, and accountability. This enables expansion of nuclear energy to meet growing energy needs through regulatory strengthening and private sector participation.