Budget 2025: FM Allows Private Participation in Nuclear Power, Boosts Distribution Reforms with Incentives

01 Feb 2025

In her eighth Budget speech on Saturday (February 1, 2025), Union Finance Minister Nirmala Sitharaman outlined several key initiatives to strengthen the power sector and open up the nuclear energy field. She announced the incentivization of electricity distribution reforms, aiming to improve the financial health of distribution companies. She also mentioned that amendments to nuclear-related Acts would be addressed by the Centre in the near future.

She emphasized the need to "incentivize electricity distribution reforms and enhance intra-state capacity" to support the financial well-being of distribution companies. To encourage states to implement these reforms, an additional 0.05% of GSDP will be granted to them, contingent on the reforms being carried out.

Furthermore, Sitharaman introduced the Nuclear Mission for Viksit Bharat, setting a target of 100 GW of nuclear power generation by 2047, which she called crucial for the country’s energy transition. To facilitate greater private sector participation, the government plans to amend the Atomic Energy Act and the Civil Liability for Nuclear Damage Act. She also announced a ?20,000 crore allocation for the research and development of small modular reactors, with plans to operationalize at least five indigenously designed reactors by 2033.

In her speech, Sitharaman stated that this Budget is designed to accelerate growth, ensure inclusive development, boost private investment, and improve the economic standing of India’s rising middle class. The key focus areas for this Budget include the poor, youth, farmers, and women. She noted that India’s economy is the fastest-growing among major global economies, with structural reforms in the past decade drawing international attention and enhancing confidence in India's future potential.

During her address, the Opposition raised concerns over President Droupadi Murmu’s speech on Friday (January 31, 2025), which led to a brief walkout before they returned to the House.