Context: The SHANTI Act marks a historic shift in India’s atomic energy policy by opening the nuclear power sector to private players and restructuring the existing liability framework.
Background: Civil Liability for Nuclear Damage Act (CLNDA) of 2010.
Before this new Act, India’s nuclear sector followed the Civil Liability for Nuclear Damage Act (CLNDA) of 2010. This law had two unique features :
- Right of Recourse: If an accident happened due to faulty equipment, the operator could sue the supplier for compensation.
- Section 46 of CLNDA: This allowed victims to file cases against operators or suppliers under other laws, including criminal law.
While these rules protected victims, international suppliers argued they were too risky, which slowed down the growth of nuclear power in India. Despite ambitious targets, 10 GW by 2000 and 20 GW by 2020, actual capacity reached only 2.86 GW in 2000 and 6.78 GW in 2020. Currently, nuclear energy contributes only about 3% of India’s electricity.
Key Changes under the SHANTI Act
The SHANTI Act brings three major structural shifts to India’s atomic energy governance:
- Private Sector Entry
For the first time, the Act allows private companies to operate nuclear power plants. Previously, this was a monopoly held strictly by the Union government.
- Supplier legal protection
The Act removes the “right of recourse.” Now, liability is channeled entirely to the operator. Suppliers are protected from civil or criminal consequences, even if equipment defects contribute to an accident. This aligns India with international conventions but removes the previous layer of supplier accountability.
- Liability Caps
The Act sets specific limits on the money paid out after an accident:
- Operator’s share: Capped between ₹100 crore (small plants) and ₹3,000 crore (large plants).
- Total Cap: Including the government’s contribution, the total is capped at approximately ₹3,900 crore.
- Section 46 Omission: The Act removes the ability for victims to seek remedies under other laws, limiting their legal options to the SHANTI Act framework alone.
Concerns and Comparison with Global Disasters
The SHANTI Act has sparked debate regarding the adequacy of these funds when compared to historical nuclear accidents:
- The Gap: While India’s total cap is around ₹3,900 crore, the estimated cost of the Fukushima disaster was ₹46 lakh crore, and Chornobyl caused losses of ₹21 lakh crore.
- Natural Disasters: The Act allows operators to be shielded from liability if an accident is caused by a “grave natural disaster.” This is a change from India’s traditional “absolute liability” principle, where hazardous industries were held responsible regardless of the cause.
Strategic and Safety Implications
The primary goal of this Act is to attract foreign investment and technology to reach a target of 100 GW of nuclear capacity by 2047. By protecting suppliers, the government hopes to bring in advanced reactors and private capital.
However, experts point out a potential “Moral Hazard.” If suppliers and operators are insulated from the full financial cost of a disaster, there might be less incentive to invest in the highest possible safety measures. Furthermore, while the Atomic Energy Regulatory Board (AERB) gets a legislative framework, its independence remains a point of discussion as its members are selected by a government-constituted committee.
Conclusion
The SHANTI Act is a strategic move to jumpstart India’s nuclear energy production by making the environment more “business-friendly” for private and foreign players. It trades off strict supplier accountability for the hope of rapid industrial growth and energy security.
