Budget 2025: Nuclear energy back in focus

From my perspective within the ESG, sustainability, and climate space, the Budget 2025 fell short of my expectations. I was particularly expecting to see concrete commitments to climate resilience, tangible action on loss and damage (including fund mobilization), and a clear strategy for reducing our reliance on fossil fuels. My hopes also included further policy reforms aligned with driving meaningful and effective climate action.

While I recognize the importance of the budget’s core focus areas—taxation, power, urban development, mining, the financial sector, and regulatory reforms—I feel there is a distinct lack of emphasis on climate action and mitigation pathways. Although Finance Minister Sitharaman mentioned “sustainability” early in her speech, this felt more like a superficial nod than a genuine commitment. The substance I was looking for simply wasn’t there.

However, I do see four positive takeaways that resonated with those of us in the sustainability field.

Nuclear Energy Mission:

The focus is back on Nuclear Energy capacity addition.

• Target of 100 GW by 2047.
• Amendments to the Atomic Energy Act and the Civil Liability for Nuclear Damage Act to ensure private sector participation.
• Dedicated R&D initiative for Small Modular Reactors (SMRs) with an outlay of ₹20,000 crore.
• Atleast five indigenously developed SMRs to be operational by 2033.

Recalling here, as per the Central Electricity Authority (CEA), the country’s electricity demand would be 708 GW by 2047. This also means India needs to increase its power capacity by fourfold to meet this requirement.

Power sector reforms:

The announced measures aims to strengthen the transmission and distribution (T&D) segments. “Incentivize distribution reforms and augmentation of intra-state transmission. Additional borrowing of 0.5 % of GSDP to states, contingent on these reforms.”

The measures will improve the financial health and operational efficiency of power companies.

Manufacturing Mission:

Under Make India, a new manufacturing mission was announced to support small, medium, and large industries, focusing on clean-tech manufacturing and creating an ecosystem for solar PV cells, electrolysers, grid-scale batteries, wind turbines, etc.

Duty rebates:

Full exemption of Basic Customs Duty (BCD) on cobalt powder and lithium-ion battery waste, scrap, and 12 other critical minerals is expected to increase the availability of raw materials. Positive for manufacturers of grid-scale batteries and batteries for EVs.

“The scrapping of basic customs duty on import of lithium-ion battery scrap and capital goods—or the machinery used to manufacture lithium-ion batteries—will strengthen the domestic battery storage ecosystem. The development of battery-backed renewable projects, which are expected to form over 33% of renewable power capacity additions in India over the next 3-5 fiscals, will benefit by having greater control over costs, quality and supply of battery systems,” said Ankit Hakhu, Director, Crisil Ratings

In addition to the above-mentioned and in continuation of the last budget announcement regarding the development of climate-resilient seeds, the Budget touched upon the formation of the National Mission on High-Yielding Seeds. And FM said, “Targeted development and propagation of seeds with high yield, pest resistance, and climate resilience.”

Focus is also seen in improving water supply through the ‘Jal Jeevan Mission’. Through the Urban Challenge Fund, ₹ 1 lakh crore is allocated to implement the proposals for ‘Cities as Growth Hubs’, ‘Creative Redevelopment of Cities’, and ‘Water & Sanitation’.”

While I was disappointed by the complete absence of measures addressing landfill reduction, I remain optimistic that future initiatives will prioritize enhancing climate resilience and building stronger communities