The SHANTI Bill: Privatizing India's Nuclear Energy Sector

 

Study Guide: Key Issues in Indian Governance and Regulation

Short-Answer Quiz

Instructions: Answer the following questions in two to three sentences, based on the provided source context.

1. What were the three principal changes introduced by the 2020 amendment to the Foreign Contribution (Regulation) Act (FCRA)?
2. According to the Union government's arguments in the Supreme Court, why were the stringent FCRA amendments necessary?
3. How does the 2020 FCRA amendment's prohibition on sub-granting funds specifically affect smaller, grassroots non-governmental organizations (NGOs)?
4. What was the Supreme Court's central reasoning for upholding the FCRA amendments in the Noel Harper & Ors. case?
5. What two existing laws is the proposed Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025, intended to replace?
6. Describe the most significant change the SHANTI Bill proposes for India's nuclear liability framework, particularly concerning equipment suppliers.
7. What are the primary strategic goals the Indian government aims to achieve with the passage of the SHANTI Bill?
8. What new allegation did Hindenburg Research make against the Adani Group in its August 2024 report?
9. How did the Adani Group and SEBI Chairperson Madhabi Puri Buch respond to the August 2024 Hindenburg report?
10. What are the main criticisms leveled against the SHANTI Bill by opposition members, as detailed in the source material?

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Answer Key

1. The 2020 FCRA amendment bars recipient NGOs from sub-granting foreign funds to other organizations, reduces the cap on using foreign donations for administrative expenses from 50% to 20%, and mandates that all NGOs must receive foreign contributions through a specific account at the State Bank of India’s headquarters in New Delhi.
2. The Union government argued the amendments were needed to address the doubling of foreign donations between 2010 and 2019, which increased the risk of foreign interference in India's internal policies. They cited intelligence reports that foreign funds were being used for "Naxalite and other activities" and that intermediary NGOs made it difficult to trace the flow of money, threatening national security.
3. The prohibition on sub-granting disproportionately affects smaller, grassroots NGOs that lack the capacity to access international donors directly. These organizations often rely on re-granted funds from larger intermediary NGOs to carry out on-the-ground work, such as social justice advocacy for minority communities and providing local services.
4. The Supreme Court upheld the amendments, reasoning that there is no fundamental right to receive foreign contributions and that it is within the Parliament's legislative wisdom to impose strict regulations. The Court found the restrictions to be reasonable measures to prevent the misuse of foreign funds and to safeguard the sovereignty and integrity of the nation.
5. The SHANTI Bill, 2025, is designed to be an umbrella law that repeals and replaces two foundational pieces of legislation: the Atomic Energy Act, 1962, and the Civil Liability for Nuclear Damage Act (CLNDA), 2010.
6. The SHANTI Bill removes the controversial supplier liability clause (Section 46 of the CLNDA), which held suppliers of nuclear equipment liable for accidents caused by defective parts. This change addresses a major deterrent that had prevented foreign companies, particularly from the US, from investing in India's nuclear power plant construction.
7. The government's stated goals for the SHANTI Bill are to attract private and foreign investment to achieve a nuclear power capacity of 100 gigawatts by 2047. This is part of a broader strategy to ensure India's energy security, support its long-term industrial growth, and meet its decarbonization goal of net-zero emissions by 2070.
8. Hindenburg Research's August 2024 report alleged that the chairperson of the Securities and Exchange Board of India (SEBI), Madhabi Puri Buch, and her husband had hidden stakes in the same obscure offshore funds based in Bermuda and Mauritius that were allegedly used by Vinod Adani for money siphoning.
9. The Adani Group vehemently denied the allegations, calling them "malicious, mischievous and manipulative" and a "recycling of discredited claims" already dismissed by the Supreme Court. Madhabi Puri Buch and her husband issued a joint statement strongly denying the "baseless allegations," stating they were "devoid of any truth" and offering full transparency of their financial documents.
10. Opposition members argue that the SHANTI Bill undermines the state's public trust obligations over life, health, and the environment. The primary criticism is that it permits profit-seeking private companies to participate in the "ultra hazardous" nuclear sector while simultaneously limiting their liability and restricting judicial remedies for victims in the event of an accident.

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Essay Questions

Instructions: The following questions are designed for an essay-format response. Do not provide answers.

1. Analyze the conflicting perspectives on the 2020 amendment to the Foreign Contribution (Regulation) Act. Discuss the government's justification based on national security, transparency, and accountability versus the concerns raised by NGOs regarding operational hardships, the impact on grassroots work, and the potential stifling of civil society.
2. Evaluate the potential impacts of the SHANTI Bill, 2025, on India's energy sector and its international relationships. Consider the bill's provisions for private sector participation, the changes to the liability regime for nuclear suppliers, and the stated goals of increasing nuclear capacity to meet climate targets.
3. The Supreme Court, in the Noel Harper judgment, established that there is no fundamental right to receive foreign contributions. Discuss the implications of this ruling for civil society organizations in India, using the arguments presented in the provided texts from both the court's decision and civil society advocates.
4. Compare and contrast the regulatory challenges and government objectives presented by the FCRA and the proposed SHANTI Bill. Discuss how the government aims to balance national interest, security, and economic growth with the operational needs and freedoms of NGOs and private corporations in these respective sensitive sectors.
5. Using the Adani Group-Hindenburg Research dispute as a case study, discuss the broader themes of corporate governance, regulatory oversight, and the role of short-sellers in the Indian business landscape as presented in the source documents.

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Glossary of Key Terms

Term / Entity	Definition
Adani Group	An Indian multinational conglomerate against which Hindenburg Research published reports in January 2023 and August 2024 alleging financial irregularities and stock manipulation.
Administrative Expenses (FCRA)	Costs incurred by an NGO that are not for "direct, on-the-field service delivery." The 2020 FCRA amendment reduced the cap on using foreign funds for these expenses from 50% to 20%.
Atomic Energy Act, 1962	India's primary legislation governing the nuclear sector, which the proposed SHANTI Bill seeks to repeal.
Atomic Energy Regulatory Board (AERB)	The main regulatory body for nuclear safety in India. The SHANTI Bill proposes to grant it statutory status to strengthen its oversight capabilities.
Civil Liability for Nuclear Damage Act (CLNDA), 2010	The law establishing liability rules for nuclear accidents in India, including a controversial supplier liability clause. The SHANTI Bill proposes to repeal this act.
Corporate Social Responsibility (CSR)	A form of domestic philanthropy where companies contribute to social causes. The source notes that CSR funding in India prioritizes sectors like health and education and is geographically concentrated in prosperous states.
Foreign Contribution (Regulation) Act (FCRA)	An Indian law that regulates the acceptance and utilization of foreign contributions by specified persons or associations, such as non-governmental organizations (NGOs).
Hindenburg Research	A US-based short-selling firm that published reports accusing the Adani Group of financial fraud and alleging conflicts of interest involving the SEBI chairperson.
New Delhi Main Branch (NDMB) of SBI	The specific branch of the State Bank of India designated by the 2020 FCRA amendment as the sole entry point for all foreign contributions to Indian NGOs.
Non-Governmental Organization (NGO)	An organization, often non-profit, that operates independently of any government, typically to address a social or political issue. The FCRA amendments have significantly impacted their ability to receive and use foreign funding.
Right of Recourse	A legal right that allows an operator of a nuclear plant to seek compensation from a supplier if an accident is caused by defective equipment provided by that supplier. This was a key issue addressed in the CLNDA and altered in the SHANTI Bill.
Securities and Exchange Board of India (SEBI)	The regulatory body for the securities and commodity market in India. Its chairperson was the subject of allegations in Hindenburg's August 2024 report.
SHANTI Bill, 2025	The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Bill. A proposed law to replace existing nuclear legislation, open the sector to private participation, and reform the civil liability regime.
Small Modular Reactors (SMRs)	Advanced, smaller-scale nuclear reactors that the SHANTI Bill aims to promote for quicker deployment and industrial decarbonization.
Sub-granting	The practice where an NGO that receives a foreign donation transfers a portion of those funds to another, often smaller, organization to carry out specific projects. The 2020 FCRA amendment prohibits this practice for foreign contributions.
Supplier Liability	A legal provision holding the suppliers of equipment and materials liable for damages in case of an accident caused by their products. A key and contentious feature of the 2010 CLNDA that the SHANTI Bill proposes to remove.