A case against the SHANTI Act

A Case Against the SHANTI Act — UPSC Study Note

1. At a Glance

• The SHANTI Act (Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India) received Presidential assent on 21 December 2025, passed in the Winter Session of Parliament. [S1]
• It replaces two major laws — the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010 (CLNDA) — in a single legislative stroke. [S1]
• The Act opens the nuclear power sector to private entities for the first time, ending the Union government's statutory monopoly. [S2]
• Critical for UPSC because it touches GS-II (governance, legislation), GS-III (energy, environment, nuclear policy), and GS-IV (ethics — corporate liability, safety accountability). [S2]

2. Why in the News

• Passed in the Winter Session 2025; Lok Sabha passage preceded Rajya Sabha; Presidential assent 21 Dec 2025. [S1]
• An op-ed by Suvrat Raju (The Hindu, 13 February 2026) raised pointed concerns over supplier indemnity, liability caps, removal of Clause 46 of CLNDA, and compromised independence of the Atomic Energy Regulatory Board (AERB). [S3]
• Debate reignited by the US–India civil nuclear framework discussions and the strategic imperative to quadruple nuclear capacity, with private capital seen as essential. [S1][S2]

3. Background & Evolution

• The CLNDA 2010 itself was a compromise — Clause 17 allowed operators to seek recourse against suppliers if damage resulted from defective equipment or wilful negligence; Clause 46 preserved victims' rights under other laws (including criminal law).
• The right of recourse in CLNDA had been a sticking point for foreign suppliers (US, France) who wanted full channelling of liability to operators — SHANTI effectively grants this demand.

4. Core Static Facts

Full name: Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Act, 2025

5. Multi-Dimensional Analysis

Legal / Constitutional

• Omission of Clause 46 of CLNDA is the most consequential change: victims of nuclear accidents previously could invoke tort law, criminal law (e.g., IPC/BNS sections), or environmental statutes; SHANTI forecloses these paths. [S3]
• Right of recourse (erstwhile Clause 17) was a unique Indian innovation — no equivalent in international CSC framework — inserted after cross-party consensus in 2010 to protect public interest. Its removal is a reversal of that consensus. [S3]
• Channelling principle (all liability → operator) mirrors the Paris/Vienna conventions but insulates equipment suppliers from legal accountability even for defective products. [S3]
• AERB's statutory independence is compromised: selection of its members by a committee constituted by the Atomic Energy Commission (the very body it is supposed to regulate) violates the principle of regulatory separation. [S3]

Economic

• Operator liability cap of ₹3,000 crore is widely considered grossly inadequate — the Fukushima (2011) cleanup cost alone exceeded ₹15 lakh crore, and Chernobyl costs ran into trillions. Capping liability creates a moral hazard where operators externalise risk onto the public. [S3]
• Opening the sector to private capital is expected to accelerate India's nuclear capacity expansion target (India has set ambitious targets; private investment seen as necessary). [S1][S2]
• Past nuclear capacity targets have been consistently missed — current installed nuclear capacity is only ~7,480 MW (as of 2024) vs targets set by Planning Commission decades earlier.

Social / Equity

• Victims of nuclear accidents bear the residual risk: capped total liability of ~₹3,900 crore would be wholly inadequate for a major accident in a densely populated country like India. [S3]
• Removal of Clause 46 particularly disadvantages marginalised communities near nuclear sites who lack resources for complex civil litigation and relied on criminal law remedies. [S3]
• No community consent mechanism or public participation requirement introduced for siting private nuclear plants.

Ethical / Governance

• Moral hazard: capping liability for both operators and suppliers removes the financial incentive to invest maximally in safety. [S3]
• Supplier indemnification rewards lobbying pressure from US/French nuclear equipment manufacturers at the cost of Indian public safety. [S3]
• AERB independence deficit: an effective nuclear regulator must be structurally separate from the promoter of nuclear power; the current arrangement blurs this line. [S3]

Geopolitical / Strategic

• The liability reform removes a long-standing barrier for US companies (General Electric, Westinghouse) and French companies (EDF/Framatome) to supply reactors to India under the India–US 123 Agreement (2008). [S2]
• Aligns India with the Convention on Supplementary Compensation for Nuclear Damage (CSC), which India ratified in 2016, enabling international pooling of compensation funds. [S2]
• Private sector entry may attract small modular reactor (SMR) technology from Western partners. [S1]

Historical

• Bhopal Gas Tragedy (1984) is the direct precedent: Union Carbide's liability was capped and restricted; victims received woefully inadequate compensation; criminal accountability was nearly nullified. Critics argue SHANTI replicates this error. [S3]
• The right of recourse in CLNDA was explicitly modelled to avoid the Bhopal outcome — its removal therefore carries historical irony. [S3]

6. Recent Developments (Last 12–18 Months)

• Dec 2025: SHANTI Bill passed by Lok Sabha, then Rajya Sabha; Presidential assent 21 Dec 2025. [S1]
• Dec 2025: PIB released key features of the Act, emphasising private participation, graded liability, and AERB statutory basis. [S2]
• Feb 13, 2026: Suvrat Raju's op-ed in The Hindu (A Case Against the SHANTI Act) provides the most detailed public critique — focusing on supplier indemnity, removal of Clause 46, AERB independence, and moral hazard. [S3]
• Ongoing: Policy debate on whether ₹3,000 crore cap and ~₹3,900 crore total cap are adequate given global precedents of accident costs.

7. Prelims Hooks

1. Full form of SHANTI Act: Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Act, 2025.
2. Presidential assent to SHANTI Act: 21 December 2025, passed in Winter Session of Parliament.
3. Laws replaced by SHANTI Act: Atomic Energy Act, 1962 and Civil Liability for Nuclear Damage Act, 2010.
4. Minimum operator liability under SHANTI Act: ₹100 crore (small/modular plants).
5. Maximum operator liability under SHANTI Act: ₹3,000 crore (largest plants).
6. Total accident liability cap (operator + Centre): 300 million Special Drawing Rights ≈ ₹3,900 crore.
7. Clause omitted from CLNDA by SHANTI Act: Clause 46 — which allowed victims to invoke other laws including criminal law.
8. Right of recourse (erstwhile Clause 17, CLNDA) is omitted in SHANTI Act, fully channelling liability to the operator. [S3]
9. AERB's selection committee: constituted by the Atomic Energy Commission, not an independent body.
10. SHANTI Act does NOT create an independent nuclear regulatory body separate from the promoter (DAE/AEC).
11. India ratified the Convention on Supplementary Compensation (CSC) for nuclear damage in 2016 — SHANTI aligns domestic law with this.
12. Private entities may now own and operate nuclear plants under Central government licence — a first in India's nuclear history.
13. The Atomic Energy Act, 1962 reserved nuclear energy exclusively for the Union government; SHANTI ends this monopoly.

8. Mains Relevance

GS Paper(s): GS-II (Governance, legislation, regulatory bodies) and GS-III (Energy, environment, nuclear sector, security)

Syllabus headings: - GS-II: Parliament and State Legislatures; Government policies and interventions for development; Statutory, regulatory, and quasi-judicial bodies. - GS-III: Energy security; Nuclear energy; Environmental impact assessment. - GS-IV (optional): Corporate ethics, accountability, and responsibility.

Plausible Mains questions: 1. "The SHANTI Act, 2025 marks a paradigm shift in India's nuclear sector. Critically analyse its provisions on liability, regulatory independence, and private participation." 2. "Supplier indemnification in the SHANTI Act has been likened to the post-Bhopal liability limitation. Do you agree? Discuss the implications for nuclear safety governance in India." 3. "Effective nuclear regulation requires structural separation between the promoter and the regulator. Examine whether the AERB framework under the SHANTI Act meets this standard."

9. Related Topics to Study Next

10. Common Errors / Trap Areas

1. SHANTI Act vs CLNDA: Do not confuse — SHANTI replaces CLNDA entirely; it is not merely an amendment. Examiners may test whether aspirants know both laws are gone.
2. Clause 17 vs Clause 46: Clause 17 was the right of recourse (operator → supplier); Clause 46 gave victims access to other laws. Both are removed, but they serve entirely different functions — conflating them is a common error.
3. AERB independence: AERB is not made independent under SHANTI — its selection is controlled by the Atomic Energy Commission (the promoter body). Aspirants may wrongly assume statutory status = independence.
4. Liability figures: ₹100 Cr / ₹3,000 Cr are operator caps; the total cap (operator + Centre) is 300 million SDR ≈ ₹3,900 crore. Do not mix the two tiers.
5. Private vs foreign ownership: SHANTI allows Indian private entities under licence — it does not automatically permit 100% foreign-owned nuclear plants; this distinction may be tested.

11. Sources

• [S1] Rajya Sabha passes SHANTI Bill 2025, after it was passed by Lok Sabha — https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2206211&reg=3&lang=1 — (Tier 1: pib.gov.in)
• [S2] The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025 — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2206598&reg=3&lang=1 — (Tier 1: pib.gov.in)
• [S3] A Case Against the SHANTI Act — Suvrat Raju, The Hindu, 13 February 2026 — https://www.thehindu.com/todays-paper/2026-02-13/th_international/articleGO0FHRO83-13529973.ece — (Tier 4: thehindu.com; also supplied as primary article by user)

Note: The ₹3,900 crore total liability figure (300 million SDR) should be verified against official exchange rates at time of examination, as SDR values fluctuate.