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Budget Snapshots: Energy Sector Set For Overhaul?
In the Union Budget 2025-26, the government showed intent to reform the energy sector. As this budget is expected to open up the sector even further, The Secretariat provides an overview of the sector, including nuclear energy, and power generation
Jan 14, 2026 · 2 min read
If the Union Budget 2025 was about reforms and "liberalisation" of the energy sector, this year must give a renewed and realistic thrust to the sector, opening it up even further to meet the growing demands within the country and globally.
Through fiscal measures, the government has been actively promoting the National Green Hydrogen Mission, the National Manufacturing Mission (for clean tech), the PM Surya Ghar Muft Bijli Yojana, and the PM-KUSUM.
With reforms in the state electricity boards (SEBs) and the operationalisation of nuclear energy frameworks, the role of private enterprises in the sector has also gained more significance.
Nuclear Energy Push
The SHANTI (Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India) Act, 2025, which came into effect on December 21, 2025, marked a major overhaul of India's nuclear energy framework.
What are the salient features of the SHANTI Act?
- SHANTI Act consolidates and modernises India’s nuclear legal framework;
- Enables limited private participation under regulatory oversight;
- Statutory recognition of the Atomic Energy Regulatory Board (AERB).
The SHANTI Act aligns with India's nuclear energy ambitions and the Nuclear Energy Mission (NEM).
2025 saw major reforms in the power generation sector.
In the Union Budget 2025-26, the government showed intent to reform the energy sector.
The Electricity (Amendment) Bill, 2025, proposed to resolve deep-rooted inefficiencies, ease financial strain, promote competition, and optimise network cost in the electricity sector.
In the Union Budget 2026-27, the electricity sector, nuclear energy, and renewables are expected to receive renewed focus, ensuring that the shortcomings from previous years are addressed with the necessary policy and budgetary interventions.
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