The Centre is exploring a law to protect investments affected by state governments’ decisions to scrap contracts as it moves to reassure foreign investors who are riled up by Andhra Pradesh’s plan to annul some clean energy agreements.
In a controversial move, the Y.S. Jagan Mohan Reddy-led Andhra Pradesh government decided to reopen renewable energy contracts inked under the previous state government led by his rival N. Chandrababu Naidu, drawing criticism from the Union government, as well as governments of France, Canada and Japan.
“This 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,” said a senior Union government official, requesting anonymity. Read More
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