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Sitharaman allays investor community fears, says will ensure contracts are honoured

FE Bureau
Nirmala Sitharaman, economy, india economy, growth, worrying fiscal situation, P Chidambaram, Arvind Subramanian, Foreign Institutional Investors, FII, inflation, government expenditure, investments, finance minister

Allaying fears among the investor community about states not honouring contractual agreements, finance minister Nirmala Sitharaman on Monday said the Central government would ensure the compliance of contracts.

"Without taking any sides, I shall tell you that investments will be honoured," Sitharaman said at the India Energy Forum by CERAWeek held here.

The recent decision of Andhra Pradesh to renegotiate the state's power purchase agreements with renewable power producers had unnerved the investment community.

"The atmosphere to invest is going to be friendlier in terms of reducing the regulatory mechanisms and their
calibrations," the finance minister added.

At the same event, Patrick Pouyanne, CEO, Total, said the company "has bigger ambitious plans in renewable energy (in India) as well, and "it is important to have contractual stability for investors".

Last week, while referring to the aforementioned development in AP, power minister RK Singh had said "one such breach caused five different ambassadors getting n touch with me".

Experts have cautioned recent instances of curtailment of solar and wind power in AP and UttarPradesh can throw a spanner in the country's ambitious plans of having 175 GW by December, 2022.

On the sidelines of Monday's event, petroleum and natural gas minister Dharmendra Pradhan said he has appealed to the finance minister to bring natural gas and aviation turbine fuel under the ambit of GST.