Simultaneously, West Bengals Left Front government finally yielded to pressure and revealed complete details of the March 2007 deal struck with Tata Motors to entice the company to set up its car project in Singur near Kolkata, instead of in the tax haven of Uttarakhand, the groups first preference.
As details of the agreement are currently available only to legislators, state commerce & industries minister Nirupam Sen read them out to a standing committee of the assembly on Wednesday. Congress legislator Sudip Bandyodpadhyay, chairman of the 14-member standing committee on commerce & industry, had written to Sen seeking details of the deal struck on March 9, 2007.
There was also a flutter in Kolkata with rumours that a meeting had been called between the Tata group, its vendors and the state government on Thursday. However, late in the evening, a spokesperson for Tata Motors in Bombay House, the Tata Group headquarters in Mumbai, said no such meeting has been scheduled.
Meanwhile, responding to what he said were repeated requests for his views on the Tatas project for the Rs 1-lakh Nano, which had attracted worldwide attention, Ambani said: The Nano project is a unique and innovative initiative, which will establish India's position as a small car hub. Indian industry must be encouraged to make such large investments in order to build the countrys competitiveness, as well as support job creation.
Ambani added, A fear psychosis is being created to slow down certain projects of national importance. This, he said, would be counter-productive for the countrys economic growth, its global image as well as Indias ability to attract investments from across the world. The Indian industry and the political leadership in the country needs to work together to deliver on the aspirations of millions of Indians in urban and rural areas, Ambani said in the statement.
West Bengal legislator Bandhopadhyay, briefing reporters at a joint press conference with Sen in Kolkata, criticised the government for charging the Tatas only Rs 1 crore a year as lease rent for the 650 acre allotted for the main plant. The Tatas will pay this for the first five years, then step it up by 25% a year for five years. This is very meagre for a rich industrial house like the Tatas, Bandopadhyay said. Rs 1 crore is nothing.
The government has set aside nearly Rs 120 crore for the acquisition of the total 997 acre for the project. Earlier, Sen had defended the incentives by pointing out that other states are offering the Tatas land free for the project.
Although the minister had briefed the assembly on March 15, 2007, about the deal, the government had earlier declined to reveal the contents fully, citing business confidentiality. The government had also blocked an opposition bid to obtain details under the Right to Information Act, citing the same reason, and attracting allegations of showing favouritism towards the Tatas at the cost of other industrialists. The standing committee is scheduled to meet again on August 29.
The minister declined to reveal to the media the details of the deal, saying he would have to consult the Tatas first.
Meanwhile, agencies reported that Sen had said the state government had to compensate the Tatas for losses incurred for not setting up the proposed small-car plant in Uttarakhand, where the Centre had extended tax concessions to investors.
The concession the West Bengal government decided to extend to Tata Motors had three components: land, refund of VAT and a soft loan. Under the agreement, Sen said the state government decided to extend a soft loan of Rs 200 crore, but since the Central Budget reduced excise duty on small cars, the loss Tata would suffer for not setting up its plant in Uttarakhand would go down.
Now, we may not have to extend a soft loan, he said.
The minister said the state government had not given any incentive more than that allowed in the special category.