The Tata Nano project in Sanand, Gujarat, has reportedly earned major concessions from the Narendra Modi government. Tata Motors will get benefits worth Rs. 9,570 crore from the state government, to be repaid only from the 21st year, at an interest rate of 0.1 per cent. The company is exempt from paying the value added tax (VAT), which will amount to Rs. 7,500 crore over a period of 20 years, assuming 2.5 lakh cars are produced every year.
The State Congress leaders have termed the agreement a “complete sellout, unacceptable to the people of Gujarat.” According to their calculations, the deferred repayment of loan and various tax concessions would benefit the Tatas to the tune of over Rs. 30,000 crore. Siddhartha Patel, the State Congress President, said, “We will consider what the Congress can do to salvage the situation in the best interest of the people, but the party is not for blocking the passage of the Nano project. Ratan Tata is a worthy son of Gujarat and is welcome to set up five factories instead of one, but he must do business at his own cost and not at the expense of the people of the state.”
CM Narendra Modi defended his decision to support the Nano project at the World Economic Forum in New Delhi; he said, “Our effort to bring the Tatas to Gujarat was part of an honest intention to help a leading industrial house of the country, honour the sentiments of the industry in general and ensure that the common man’s dream of an affordable car does not shatter.”
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