Tata Motors, which recently shifted its Nano small car project to Sanand in Gujarat, will get benefits worth INR95bn from the state government for developing infrastructure around the project area, sources told an Indian newspaper.

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Tata Motors would get 20 years from the commencement of the project to repay the amount at an interest rate of 0.1%. The amount will be repaid by adjusting value added tax dues of the company, the sources told the Economic Times of India.


The company would use the fund to build a township and a ‘transport hub’ near the plant location in Charodi village near Sanand to meet the logistics support needed by the project.


Local government officials refused to comment on the deal between the government and the automaker.


However, Arjun Mothwadia, former leader of the opposition in the state assembly, said the deal had been approved by both sides though it was yet to be announced.

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Though the Congress party, to which Mothwadia belongs, made several efforts to get the details of the arrangement through the Right to Information provisions, it did not succeed, he added.


The government had also pledged to provide 100 acres for Tata for developing the proposed township.


However, Tata Motors officials told the paper the total amount was an aggregate of “various concessions”, including the 100 acres, stamp duty exemptions and concessional power tariff.


Tata Motors last month shifted the almost-complete Nano plant from Singur in West Bengal to Sanand following protests by the opposition Trinamool Congress-led farmers against the project.