Government sources said the new Chief Minister Narayan Rao Rane is examining the issue. The state cabinet had announced the decision to offer sops to Indica on January 14, while Rane took over on February 1.

Although there was no decision by Telco to pass down the benefits of the exemption to consumers, Tata Finance officials said that most of the customers have been wanting to know about a price cut, if any.

"Even though the difference in price would not be more than Rs 5,000-7,000 we are still trying hard to convince buyers that there is little that we can do as the Government is yet to notify its decision and thereby bring it into effect," said a Tata Finance official.

The concessions announced by the Government include exemption of 10 per cent sales tax, 2 per cent central sales tax and 6 per centpurchase tax for two years. The decision was taken by the cabinet sub-committee headed by the then Chief Minister Manohar Joshi. The aim was to promote "swadeshi" industry and give a boost to the automobile sector.

The incentives were to be given only to automobile and auto components projects involving an investment of Rs 1,500 crore or more.

The alliance partners, BJP and the Shiv Sena, had offered these incentives to Tatas as the project would generate direct employment for 4,000 and indirect employment for more than 29,000 people.

The government announcement in January had led to the Telco scrip zooming at the bourses. On the day of the announcement itself the scrip had witnessed record volumes on the back of expectations that the sops would lead to enhanced sales of the car which in turn would could propel the country's largest truck manufacturer out of its current downturn.

"The chief minister is looking at the proposal and a decision should be taken shortly," said a state-governmentsource.

The Indica had a flood of bookings numbering over a lakh, but troubles at some vendors' end threw the delivery schedule out of gear. The company is to deliver about 60,000 cars by the end of March, 2000. After a slow start deliveries have picked up in the past fortnight or so. About 3,000 cars have been delivered in the past 10 days alone.