The Act effectively caps the maximum amount of liability in case of each nuclear accident at ₹15 billion (US$170 million) to be paid by the operator of the nuclear plant, and if the cost of the damages exceeds this amount, special drawing rights up to 300 million will be paid by the Central Government.
The issue of an accident is sensitive in India, where a gas leak in a US company's Union Carbide factory in Bhopal city killed about 20,000 people in 1984 in one of the world's worst industrial disasters.
[3] India had an ambitious goal to increase 5-fold the amount of electricity produced from nuclear power plants to 20,000 MWe by 2020.
Although there was no international obligation for such a bill, in order to attract the US companies involved in nuclear commerce such as General Electric and Westinghouse, it was necessary to introduce a liability bill which would help these private companies in getting insurance cover in their home state.
[citation needed] Another motive for the bill was to legally and financially bind the operator and the government to provide relief to the affected population in the case of a nuclear accident.
[5] A major point of debate was the amount of financial assistance to be provided under such circumstances as it was considered insufficient and unsatisfactory.
Other than that, the bill contained certain clauses which if implemented would let free the manufacturer and supplier legally and to a large extent financially as well.
This clause deals with the legal binding of the culpable groups in case of a nuclear accident.
In reality, no one will be considered legally liable because the recourse taken by the operator will yield only₹15 billion (US$170 million).
SECTION 17(B):Right to recourse in case of a nuclear damage because of the patent or latent defects in the materials or his employee.
[7][8] The Bhopal Gas tragedy was another accident where an inherently dangerous substance was leaked and caused havoc.