Budget announces National Nuclear Energy Mission as India chases clean energy

Budget Profile: A breakdown of income and expenditure

Finance Minister Nirmala Sitharaman on February 1 announced a National Nuclear Energy Mission with an outlay of Rs 20,000 crore to meet India's growing power demand using cleaner fuel.

The funds are meant for research and development of small modular reactors (SMRs). Presenting the Budget for 2025-26, Sitharaman said the mission aims to operationalise five SMRs by 2033.

She reiterated that India would strive to achieve a nuclear power generation capacity of 100 gigawatt (GW) by 2047.

In her previous Budget, the minister said the government would partner the private sector to set up Bharat Small Reactors and for R&D newer technologies for nuclear energy. The FY25 Budget allocated Rs 24,969 crore for the same.

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This year, however, the allocation is was lower at Rs 20,000 crore.

Also Read: Explained: India's roadmap to achieve 100 GW nuclear power capacity by 2047.

Laws to be amended

The finance minister said the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act would be amended to attract private sector investment. The atomic energy minister had informed Parliament about it last year.

In December 2024, the government-owned Nuclear Power Corporation of India Ltd (NPCIL) invited request for proposals (RFPs) from private players to set up Bharat Small Reactors (BSRs), the first formal move by the Centre to decentralise the country's nuclear power sector.

Also Read: In a historic first, India invites private participation in nuclear power.

India’s nuclear sector is regulated. It is governed by the Atomic Energy Act, 1962, under which only government-owned entities can generate and supply nuclear energy. There has been no private sector involvement in the nuclear power sector so far.

Why chase nuclear power?

India cannot reduce its emission intensity solely through renewable energy such as solar, wind and hydro. Even if it does achieve its Nationally Determined Contribution (NDC) target through renewable energy, the cost of power would be very high.

An April 2024 report by the government’s principal scientific adviser said relying primarily on renewable energy to meet India's net zero target by 2070 would result in higher tariffs for consumers. The country would have to simultaneously increase its nuclear power capacity to keep electricity affordable, the report said.

Also read: Tata Power to foray into nuclear energy when govt opens up the sector, says CEO Praveer Sinha.

The government's move is a step toward increasing India’s nuclear power capacity from 8,180 MW to 22,480 MW by 2031-32 and eventually 100 GW by 2047.

India has committed to reducing the emission intensity of its GDP by 45 percent by 2030 from the 2005 level and achieving about 50 percent cumulative electric power installed capacity from non-fossil energy resources by 2030.

What is nuclear power?

Nuclear power is not renewable energy but is a zero-emission clean energy source. It generates power through fission, which is the process of splitting uranium atoms to produce energy. The heat released by fission is used to create steam that spins a turbine to generate electricity without the harmful by-products emitted by fossil fuels. The PHWR technology uses natural uranium, heavy water coolant, and a horizontal cylindrical vessel called a calandria to produce nuclear energy.