Investor Confidence on India appears to have shaken after Jagan Mohan Reddy Government’s Controversial plan to scrap renewable energy agreements and the Government of India is worried that FDI flows are impacted with this move. We are told that the Central Government is contemplating to take redressal measures.
Modi Government is planning to bring in an Act which will not allow canceling the contracts arbitrarily after reaching a certain state. Unless there are proofs of Corruptions, heavy penalties will be imposed on the State Governments who resort to such irresponsible acts.
The canceling of contracts signed during the TDP regime by the Jagan Government came as a rude shock to the investors. They are skeptical about investing in India. “If the agreements signed by a Government are not honored, there is a lack of trust. So, there is no guarantee that the next government will not overturn the current government’s decision,” the investors opined.
Despite several warnings, the Jagan Government is still adamant about canceling the renewable energy pacts. Andhra Pradesh’s decision could put at risk 5.2 gigawatts (GW) of solar and wind energy projects, with an estimated debt exposure of more than ₹21,000 crores.
