Model Answer

Recent legislative initiatives such as the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025 and the Sabko Bima Sabko Raksha (Amendment of Insurance Laws) Bill, 2025 reflect a broader shift in India’s economic strategy towards liberalisation, capital mobilisation, and institutional reform in strategically significant sectors. Together, these Bills aim to address long-standing structural constraints in energy security and financial sector development.

The SHANTI Bill seeks to repeal the Atomic Energy Act, 1962 and the Civil Liability for Nuclear Damage Act, 2010, which had effectively restricted private and foreign participation in India’s nuclear sector. The primary objective of this reform is to secure reliable, non-fossil base load energy as India transitions away from coal to meet its climate commitments. Nuclear energy, with its low-carbon footprint and high capacity factor, is critical for grid stability. However, scaling up nuclear capacity requires massive capital investment and access to advanced technologies. By enabling foreign funding—including sovereign wealth funds from West Asia—and facilitating investment in emerging technologies such as Small Modular Reactors (SMRs), the Bill seeks to accelerate capacity addition and domestic manufacturing.

At the same time, the reforms raise important concerns. Nuclear energy involves high safety, security, and liability risks. Diluting liability provisions without robust regulatory safeguards could undermine public confidence. Therefore, effective oversight, transparent liability frameworks, and strengthened institutional capacity will be essential to balance openness with national security and safety imperatives.

The Insurance Laws Amendment Bill complements this liberalisation agenda by opening the insurance sector to 100% foreign direct investment. By reducing the Net Owned Funds requirement for foreign reinsurers and enhancing the enforcement powers of the Insurance Regulatory and Development Authority of India (IRDAI), the Bill aims to deepen insurance penetration, improve competition, and strengthen consumer protection. Increased capital inflows are expected to expand product offerings, enhance risk coverage, and support long-term investments in infrastructure and social security.

Further, empowering the Life Insurance Corporation (LIC) to establish zonal offices without prior government approvals enhances operational autonomy and responsiveness, aligning with modern governance practices. The steady rise in insurance penetration and density since 2014–15 indicates growing market potential that can be further unlocked through reform.

In conclusion, while both Bills signify India’s intent to integrate more deeply with global capital and technology flows, their success will depend on strong regulatory frameworks, institutional capacity, and risk management. If implemented prudently, these reforms can strengthen India’s energy transition and financial resilience while safeguarding strategic and public interests.