UPSC DAW Mains Answer Writing 23rd July 2025

UPSC DAW Mains Answer Writing 23rd July 2025

Question

‘India’s target of achieving 100 GW nuclear power capacity by 2047 requires substantial private and foreign investments.’ In this context, discuss the necessary reforms in the legislative, financial, and regulatory frameworks to effectively facilitate such investments. (15 marks, 250 words) 

Model Answer

Introduction:  

  • India’s target of achieving 100 GW nuclear power capacity by 2047, as outlined in the Union Budget 2025–26, is critical to achieving Viksit Bharat and Net Zero by 2070 goals. With current capacity at 8.18 GW (CEA, 2024), significant private and foreign investments are essential. However, this requires structural reforms in India’s legislative, financial, and regulatory frameworks. 

 Legislative Reforms: 

  • Amend the Atomic Energy Act, 1962:  

  • Permit private investment in balance-of-plant areas and enable public-private joint ventures (E.g., NPCIL-NTPC). 

  • Allow controlled FDI (up to 49%) in non-sensitive areas under government oversight. 

  • Revise Civil Liability for Nuclear Damage Act (CLNDA), 2010: 

  • Dilute Section 17(b) to align with international norms (CSC, Vienna Convention) and reduce supplier liability risks. 

  • Separate Commercial & Strategic Nuclear Zones: 

  • Allow private sector in commercial power generation; retain strategic reactors under state monopoly. 

 Financial Reforms: 

  • Classify nuclear as ‘green energy’: 

  • Nuclear is not currently classified as ‘renewable’ under India’s green taxonomy. Reclassification will allow access to green finance, tax breaks, and sovereign green bonds. 

  • Introduce Viability Gap Funding (VGF): 

  • Essential to mitigate high upfront capital costs (~$2 million/MW) and provide revenue assurance. 

  • E.g. NTPC-NPCIL JV at Mahi Banswara may benefit from these structures. 

  • Facilitate Long-term PPAs: 

  • Ensure tariff assurance and revenue security for private operators. 

  • Enable nuclear infrastructure bonds & REITs: 

  • Diversify capital inflows and reduce state burden. 

 Regulatory Reforms:  

  • Establish Independent Nuclear Regulator: 

  • The Atomic Energy Regulatory Board (AERB), though autonomous, lacks statutory status. A 2011 Bill proposing a Nuclear Safety Regulatory Authority (NSRA) should be revived to ensure impartial oversight, especially with private players entering. 

  • Tariff Determination & Dispute Resolution: 

  • Currently governed by the Atomic Energy Act. Conflicts like NPCIL vs. Gujarat Urja Vikas Nigam show the need for clarity on whether the Electricity Act, 2003 and CERC jurisdiction apply to nuclear tariffs, especially for PPP projects. 

  • Streamlining Approvals: 

  • Single-window clearance mechanisms for land acquisition, environmental clearance, and safety licensing will accelerate project timelines. 

  • Strengthen Fuel Assurance Mechanisms: 

  • Ensure supply security through strategic uranium reserves and NSG agreements. 

  • Waste Management & Decommissioning Guidelines: 

  • Clarify long-term liability for private operators. 

 Conclusion:  

  • As emphasized in COP28’s Declaration to Triple Nuclear Energy (2023) and supported by the World Bank-IAEA MoU (2024), nuclear power is central to low-carbon growth. However, India's ambitious target hinges not just on technological prowess but on robust frameworks that encourage private and foreign participation while maintaining public safety and strategic control. India must now move from intent to decisive reforms to unlock private and global capital in this strategic sector.