narendra modi led central government is exploring a law to protect investments affected by state governments’ decisions to scrap contracts. This is to reassure foreign investors who are riled up by YS jagan Mohan Reddy Government's plan to annul some clean energy agreements. It is known to our readers that the jagan government decided to reopen renewable energy contracts inked under the previous state government led by his rival Chandrababu Naidu.
The move drew criticism from the Union government, as well as governments of france, canada, and Japan. The Center feels that is has sent a very bad signal to international investors. The Act being explored is that in the event of investments reaching a certain stage, a state government can’t arbitrarily cancel the contracts. In the event of any such step taken by a state government, it will attract penalties and will make it difficult for them to do so
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.
