In her budget speech on Saturday, Finance Minister (FM) Nirmala Sitharaman announced the decision to amend the two atomic Acts that have paralysed the prospects of nuclear power in India. The long-overdue decision has not come a day too soon, as the world moves towards reviving the nuclear energy industry.
The story of India’s atomic slide is a tragic one. It is impossible to believe that India was the second Asian nation to build a nuclear power plant in 1969 at Tarapur — just after Japan and long before China. It also built up an impressive nuclear research and development programme in the 1950s and 1960s with significant assistance from its Western partners. At the peak of nuclear optimism in 1970, India hoped to generate 10,000 MW of atomic power by 2000. Twenty-five years after that deadline, India’s nuclear power sector is limping along at about 8,200 MW. China’s installed nuclear capacity today is about 58,000 MW. South Korea has 32,000 MW. China and South Korea are now major exporters of nuclear reactors. The UAE, which launched its nuclear power programme less than a decade ago, has 5,200 GW of nuclear capacity, centred around South Korean reactors.
Through the last decade, Delhi has repeatedly revised the targets for nuclear capacity but could not realise them. The FM has now set a new target of 1,00,000 MW by 2047. She was realistic enough to recognise that this is not possible without rewriting the two atomic Acts that provide the legal framework for nuclear energy in India: The Atomic Energy Act (1962) and the Civil Liability for Nuclear Damage Act (CLNDA) of 2010.
If early policy moves in the late 1940s and 1950s laid the foundation for the development of nuclear energy in India, unfortunate developments — external and internal — as well as major political bungles have helped create the current nuclear impasse.
The private funding from the Tatas, at the request of Homi Bhabha, set the stage for nuclear research in the early 1940s even before the atomic age dawned formally with the bombing of Hiroshima and Nagasaki. The policy of creating internal capacities through foreign collaboration gave India a head start in atomic energy development in the 1950s. From the turn of the 1970s, India’s atomic problems began to multiply.
One part of the problem was the change in the global order on nuclear energy cooperation when the Nuclear Non-Proliferation Treaty came into force in 1970. The NPT froze the number of nuclear-weapon states at five (those who had already tested atomic weapons before 1967) and began to impose restrictions on the transfer of nuclear technologies to the rest of the world. If India’s nuclear adventure flourished in the era of atomic internationalism, it began to wilt under external pressures from the 1970s. If India had done a nuclear test before January 1967, it would have been on the right side of the nuclear divide. But the inability or unwillingness to become a nuclear-weapon power put it on the wrong side. (There are reports that US President John F Kennedy had offered to help India conduct a nuclear weapon test in 1963, but Nehru had turned him down.)
When India did conduct a nuclear test in 1974, it made matters worse for itself. Delhi’s too-clever-by-half claim that its nuclear test was for peaceful purposes did not impress its hostile neighbours — Pakistan and China. The latter intensified its atomic collaboration with the former. The result: Pakistan’s nuclear arsenal built with Chinese cooperation. The rest of the world tightened nuclear sanctions against India, which was seen as a major threat for nuclear proliferation.
India’s ideological and policy confusions put it in the worst of all worlds — it was neither a “nuclear” fish nor a “non-nuclear” fowl. It took another quarter of a century for India to break out of this nowhere land.
India finally conducted five nuclear tests in May 1998 and declared itself a nuclear-weapon power. Although they brought a new set of sanctions, the tests opened the door for a reconciliation with the US and the global nuclear order. After initial anger, Washington began to explore the prospects for nuclear accommodation with Delhi. During 2005-08, the George W Bush administration helped craft a framework in which India could keep its nuclear weapons and resume civilian nuclear cooperation, which it had been denied since 1970. The US had to do some heavy lifting to change the domestic non-proliferation law and international norms to facilitate India’s release from the nuclear jailhouse. But before India could celebrate, its political class, in a spectacular act of collective self-harm, shot itself in the foot by passing the CLNDA in 2010. If the civil nuclear initiative created conditions for rapid renewal of nuclear power generation, the liability act made it impossible for domestic private investment and foreign collaborations.
The global norms mandate that all liability in the event of an accident should be channelled to the plant operator to ensure swift compensation to the victims. The CLNDA, in contrast, enshrined the operator’s right to legal recourse against component and equipment suppliers in the event of an accident. The Modi government, which came to power in 2014, sought to provide some solution to finesse the problem, but it has not attracted foreign and domestic capital to participate in India’s nuclear power programme. Over the last decade, it has become increasingly clear that without amendments to the CLNDA, there is little prospect for an expanded contribution of nuclear power to India’s energy needs and a smooth green transition.
Beyond the civil liability act, there is a deeper structural problem ailing the Indian atomic energy programme. It is the fact that atomic energy activity is a government monopoly under the Atomic Energy Act of 1962. Total government control of atomic energy development might have made sense in 1962, but it does not anymore. The monopoly makes it impossible to generate the necessary capital for a massive expansion of nuclear power generation in India. Today, the Department of Atomic Energy (DAE) relies entirely on government funding.
It also prevents the creation of a nuclear ecosystem that can drive innovation, create economies of scale and develop networks of global collaboration to accelerate atomic power generation in India. Over the last seven decades, private- and public-sector companies like Tata, Godrej, L&T, Walchandnagar and BHEL have contributed by supplying critical equipment for atomic power plants. Today, they are in a position to take charge of building power plants on their own while relying on the DAE to provide some of the technologies.
The lessons from the recent reform of the space sector are instructive. Even a limited liberalisation of the regulations has seen a massive outburst of private-sector activity in the space domain. Something similar could take place in the atomic energy sector if private players are allowed to enter it.
Amendments to the Atomic Energy Act should create a broad new template for India’s technological evolution. Government agencies like the DAE, ISRO and DRDO should focus on research and cede the production of equipment and related industrial activity to the private sector. These science-and-technology monopolies have outlived their utility and have become a drag on the prospects for India’s technological transformation.
The writer is a contributing editor on international affairs for The Indian Express
The global norms mandate that all liability in the event of an accident should be channelled to the plant operator to ensure swift compensation to the victims. (Illustration by C R Sasikumar) 
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