The Andhra Pradesh government led by chief minister N Chandrababu Naidu is forced to cough up crores of rupees to Adani Power, for which a power purchase agreement was signed with the Solar Energy Corporation of India (SECI) during the previous YSRCP regime.
While in opposition, Naidu’s Telugu Desam Party strongly alleged that the long-term agreements entered into by the Jagan government with the SECI (indirectly Adani Power) would impose a financial burden of nearly Rs 1 lakh crore on Andhra Pradesh over the next 20–25 years. He argued that the contracts were financially detrimental to the state.
Even after coming to power, Naidu told reporters on January 1, 2025 that Jagan had been “caught like a laddu” in alleged irregularities relating to SECI agreements exposed in the US court and assured a thorough investigation.
However, more than a year later, critics point out that no visible action has been taken against Jagan or other officials in connection with the deal.
The Naidu government had neither pursued the case against Jagan in the US court, nor had he taken any decision to terminate the agreement with the SECI, despite knowing that the state government is imposing a huge burden on the state.
Recently, energy minister Gottipati Ravi Kumar said cancelling the SECI agreement would immediately cost the state approximately Rs 3,000 crore.
The government appears to have weighed this immediate fiscal impact against the projected long-term burden and opted not to annul the contract.
“When compared the long-term burden of Rs 1 lakh crore on the state, it would have been better to cancel the agreement and pay Rs 3,000 crore,” an analyst said.
The problem here is not the financial implications of the cancellation of PPA with SECI. It is about entering into a confrontation with the mighty Adani Group which in turn will antagonise Prime Minister Narendra Modi, which Naidu is afraid of.
Interestingly, in the neighbouring Tamil Nadu, the Stalin government reportedly reconsidered or cancelled certain agreements involving Adani Group entities, citing potential financial burden on the public exchequer.
In contrast, despite describing the SECI agreement as a “massive scam” earlier, the Andhra Pradesh government has allowed it to continue.
