According to this report :-
IDRW , the french have already looked into the Kaveri engine and appear to have found out the problems with Kabini core, GTRE alone would take another 5-7 years maybe more to address this issue but with french assistance, the engine might get ready for flight tests within 24 months. I guess someone from the inside can help us understand about what is going on ? MTBO tests are happening, that means its not scrapped, but claims are that french assistance will not be taken (I am yet to find some reliable input on that). Or will the french assistance be taken, since it appears that they've already studied it.
Seriously guys, a lot of confusions with a little transparency.