Context:
During her Union Budget 2025-26 speech, Smt. Nirmala Sitharaman, Union Finance Minister announced wide-ranging initiatives directed at the nuclear energy and electricity distribution reforms.
Nuclear Energy-Reforms in Electricity Sector
Nuclear Energy Mission
A Nuclear Energy Mission will be launched with research and development of Small Modular Reactors and would significantly invest Rs 20,000 crore.
- At least 5 indigenously developed SMRs should operationalize by 2033.
Nuclear Energy Development Targets
- The development of 100 GW of nuclear energy by 2047 is regarded as a must-do to ensure India’s energy transition process.
Private Sector Partnership
- Amendment to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act is to be done by encouraging active participation of the private sector in the nuclear energy circle.
Reforms on Electricity Distribution and Transmission
Incentivisation of States for Electricity Distribution
- States shall be incentivized towards electricity distribution reforms as well as improving intra-state transmission capacity.
Additional Borrowing for States
- Incentivize such reforms by allowing states an incremental borrowing of 0.5% of their GSDP (Gross State Domestic Product), subject to the stated conditions of these reforms.
Conclusion
The Union Budget 2025-26 will set off a transformative course in the progress of nuclear energy with Small Modular Reactors (SMRs) that will further improve the electricity sector with state-level reform incentives. The initiatives undertaken are focused toward private sector involvement and electricity distribution reforms to advance India’s overall energy security and further improve the health of electricity firms.
