India's power reforms, salary hikes spook investors in state bonds

Mumbai

PRIME Minister Narendra Modi's efforts to rescue India's ailing power sector and end the country's notorious blackouts are creating an unforeseen headache for state governments: Investors are suddenly shying away from their debt.

Foreign bond investors, who were falling over each other to buy state government debt just a few months ago, are now giving it a wide berth as Mr Modi's…