August 24, 2010IndiaIndia-USliberalisationnuclear energynuclear powerPublic Policy

Liability-shiability absurdity

Liberalise the nuclear power industry!

This is an archived blog post from The Acorn.

It is painfully hard to watch the ongoing drama over civil nuclear liability. So much is the political class—from the UPA government to the opposition BJP—engrossed in lawyerly detail, so much has the Congress party abandoned the idea of economic reforms which Manmohan Singh was once famous for, that the biggest policy issue is not even being debated.

That issue is the full liberalisation of the nuclear power sector. There is no good reason why only state-owned (or majority state-owned) enterprises should operate the engines that make electricity from uranium. Instead of quibbling over whether or not to limit liability to operators or to extend it to their suppliers, the political class and the strategic analysts who advise them should be setting their sights on amending the Atomic Energy Act to liberalise the sector and allow for a neutral regulator to supervise them.

During the thick of the debate over the India-US nuclear deal, this blog had argued that liberalising the nuclear power industry is necessary, and that the nuclear deal is an opportunity to accomplish that task. Instead, both the government and the opposition have tied themselves in a legalistic bind over the irrelevant issue of supplier liability.

Irrelevant? Largely, yes. Because in a liberalised environment, all the government needs to do is hold the operator liable, and leave it to the operator to decide how it wants to cover its liabilities.

Related Link: PRS Legislative Research’s M R Madhavan’s brief on the civil nuclear liability bill, in Pragati



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