SHANTI BILL: HOW INDIA IS OVERHAULING ITS NUCLEAR POWER SECTOR

Why in the News?

• Parliament has passed the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025.
• The law permits private sector participation in nuclear power plant operations, a first for India’s tightly regulated nuclear sector, while also addressing environmental concerns.
• It replaces the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010, overhauling the existing nuclear framework and incorporating environmental safeguards.
• The Bill redefines liability norms, including caps on compensation in case of nuclear accidents, while considering the polluter pays principle.
• It strengthens and empowers the atomic energy regulator, enhancing safety oversight and environmental impact assessment processes.
• The legislation redraws rules for plant construction, operation, dispute resolution, and compensation mechanisms, reshaping India’s nuclear power regime while addressing environmental jurisprudence.

Private Sector Involvement and Safeguards under the SHANTI Bill, 2025

• The Bill was passed amid strong Opposition concerns, especially over the dilution of provisions fixing liability on equipment suppliers in case of nuclear accidents and potential environmental impacts.
• The Centre maintains that the law is crucial to achieve India’s target of 100 GW nuclear power capacity by 2047, while ensuring a pollution-free environment.
• The new framework allows both public and private companies to set up nuclear power plants, subject to stringent environmental clearances.
• It also permits private participation in transport, storage, import and export of nuclear fuel, technology, equipment and nuclear minerals, earlier restricted to the public sector, while adhering to environmental regulations.
• A stringent safety regime is retained despite private entry, including environmental impact assessments.
• All entities must obtain mandatory safety authorisation from the Atomic Energy Regulatory Board (AERB), which now considers environmental factors in its decision-making process.
• AERB approval is required for the manufacture, possession, use, transport, import, export and disposal of radioactive substances, radiation-generating equipment, and for establishing, operating or decommissioning radiation facilities, in line with environmental protection principles.
• The Bill does not explicitly allow foreign direct investment in the nuclear sector but leaves room for future clarity through government notifications.
• Subsequent rules are expected to align equity infusion norms with DPIIT and existing foreign equity participation guidelines, potentially considering environmental criteria.
• The Central Government retains exclusive control over critical and sensitive activities, including those with significant environmental implications.

Question of Accountability under the SHANTI Bill, 2025

• A major contentious change is the removal of the supplier’s “right of recourse” provision present in the earlier liability law, which has implications for environmental accountability.
• Under Section 17 of the Civil Liability for Nuclear Damage Act, 2010 (CLNDA), nuclear operators could seek recourse after paying compensation if certain conditions were met, including environmental damage.
• The new law retains clauses (a) and (c) but omits clause (b), which related to defective equipment or substandard services, potentially affecting environmental safeguards.
• This effectively removes long-term and uncertain liability exposure for nuclear equipment suppliers, a key demand of industry and foreign vendors, but raises concerns about environmental responsibility.
• The Bill also moves away from the earlier flat liability cap of ₹1,500 crore for reactors of 10 MW or more, introducing a more nuanced approach to environmental and safety liabilities.
• It introduces graded liability caps, linked to the size and capacity of the nuclear installation, which may impact environmental risk assessments.
• The requirement to maintain insurance or other financial security to cover liability applies only to private nuclear operators, potentially affecting the application of the polluter pays principle.
• Centrally owned nuclear installations are exempt, though the Centre is empowered to set up a Nuclear Liability Fund to meet its liabilities in case of an accident, including environmental damages.
• On enforcement, the SHANTI Bill introduces a dual penalty framework: ○ Monetary penalties for less severe violations (absent in the earlier regime). ○ Imprisonment for serious and grave offences, strengthening deterrence mechanisms for environmental violations.

Regulatory Autonomy under the SHANTI Bill, 2025

• The new law grants statutory status to the Atomic Energy Regulatory Board (AERB), marking a major institutional shift with implications for environmental governance.
• The AERB was earlier set up in 1983 under Section 27 of the Atomic Energy Act, 1962, to perform regulatory and safety functions, including environmental oversight.
• Section 27 only allowed the delegation of powers by the Centre, and did not create an independent statutory regulator capable of enforcing environmental norms effectively.
• Consequently, the AERB functioned as a subordinate authority, exercising powers assigned by the Central Government rather than as an autonomous regulator with environmental mandate.
• In 2012, the Comptroller and Auditor General (CAG) flagged serious concerns, including: ○ Dependence of the AERB on the Department of Atomic Energy (DAE) for budget and administration ○ Lack of separation between regulatory and non-regulatory functions, affecting environmental oversight ○ Subordination of the AERB Chairperson to the Secretary, DAE ○ A conflict of interest, as the AERB Chairperson reported to the Atomic Energy Commission, whose Chairperson is also Secretary, DAE — an entity regulated by the AERB
• The SHANTI Bill addresses these deficiencies by providing the AERB with independent statutory authority, enhancing its capacity for environmental regulation.
• The law also establishes an Atomic Energy Redressal Advisory Council to: ○ Address grievances of licensees, including environmental concerns ○ Facilitate dispute resolution, potentially involving environmental matters ○ Review orders of the Central Government, including those related to environmental clearances ○ Handle complaints referred by the AERB, which may include environmental violations
• It further provides for a Nuclear Damage Claims Commission to deal with cases of severe nuclear damage, including environmental impacts.
• The Appellate Tribunal for Electricity is designated as the appellate authority to hear appeals under the law, including those against: ○ Orders of the Redressal Advisory Council, which may involve environmental decisions ○ Penalties imposed by the adjudicating officer, potentially for environmental violations

The SHANTI Bill, 2025 represents a significant overhaul of India’s nuclear energy sector, balancing the need for private participation with stringent safety and environmental regulations. By granting statutory autonomy to the AERB and restructuring liability and dispute-resolution mechanisms, the bill aims to address regulatory conflicts while ensuring environmental protection. The integration of environmental considerations, such as the polluter pays principle and precautionary principle, into the nuclear regulatory framework reflects a growing emphasis on environmental jurisprudence in India’s energy policy.

Mains Question (250 words):

The SHANTI Bill, 2025 grants statutory autonomy to the AERB and restructures liability and dispute-resolution mechanisms. Examine how these reforms address regulatory conflicts while balancing safety, accountability, and private participation, considering environmental impact assessments and the principles of environmental democracy.