Budget 2025: Govt to boost Nuclear power, incentivise state Discoms

*FM Nirmala Sitharaman launched the Nuclear Energy Mission with a budget allocation of ₹20,000 crore.

*The Budget unveils plans to incentivise states for implementing electricity distribution reforms and enhancing intra-state transmission capacity.

*The Budget introduced a National Manufacturing Mission to promote electric vehicles (EVs), solar power and grid equipment. 

Finance Minister Nirmala Sitharaman presented her 8th budget on Saturday, February 1, 2025. In her address, Sitharaman emphasised the theme of “Sabka Vikas,” aiming for balanced growth across all regions of India. Quoting the famous words of Telugu poet and playwright Gurajada Appa Rao, she stated, “A country is not just its soil; a country is its people,” underlining the importance of people-centric development.

In a major push for clean energy FM Sitharaman launched the Nuclear Energy Mission aimed at the research and development of Small Modular Reactors (SMRs). With a budget allocation of ₹20,000 crore, the mission will focus on indigenously developed SMRs, with at least five operational units expected by 2033. The Finance Minister emphasised that achieving 100 GW of nuclear energy by 2047 is essential for India’s energy transition and sustainable future. To encourage private sector involvement, amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act will be introduced.

The Budget also unveiled plans to incentivise states for implementing electricity distribution reforms and enhancing intra-state transmission capacity. In exchange, states will be allowed additional borrowing of 0.5 percent of their Gross State Domestic Product (GSDP), contingent on these reforms, thereby improving the financial health of electricity companies.

Further emphasising the government’s commitment to innovation, the Budget introduced a National Manufacturing Mission to promote electric vehicles (EVs), solar power, and grid equipment. This initiative aims to boost manufacturing in crucial sectors, contributing to the country’s long-term growth and energy independence. Additionally, the Budget proposes a duty exemption on cobalt, lithium-ion battery waste, and 12 critical minerals, aimed at fostering the growth of India’s EV and renewable energy industries.

This forward-looking Budget underscores India’s focus on reform, innovation, and energy transition, positioning the country for a sustainable and inclusive future.