Skip to main content

Official government resolution on how Gujarat was made "preferred destination" for Tatas

It is a matter of general knowledge that five years ago the Tata  Motors was provided huge subsidies to shift its Nano plant from West Bengal to Gujarat, following a meeting between Gujarat chief minister Narendra Modi and top tycoon Ratan Tata. Ever since then, he has been hardselling Gujarat as the topmost investment destination for India. However, for long the Gujarat government kept a document which allowed the subsidy allowed subsidies a well-guarded secret. Prominent environmentalist Rohit Prajapati has now put the document in public domain:
Sanction of Loan to M/S Tata Motors Ltd. for Nano Car Project
Government of Gujarat, Industries and Mines Department
Resolution No. TMI./10/2008/51/1
Sachivalaya, Gandhinagar
Date:- 1/1/2009


Preamble:
For more than three decades, Gujarat is the preferred destination for investment in almost all industrial sectors, barring a few. As a result of the proactive role of the state government to attract investments, numbers of entrepreneurs / industrial houses are selecting the state as a destination of choice for investments in the sectors of Textile, Gems and Jewellery, Chemicals and Petrochemicals, Pharmaceuticals and Drugs, Steel, Cement, Engineering among others. However, the state is yet to attract good investment in the Automobile and auto ancillary sector. The auto sector has strong presence in other states like Maharashtra, Tamil Nadu and outskirts of Delhi state, where as Gujarat has only one car project. Though Gujarat has a strong engineering base and a number of engineering units, mainly in the MSME Sector, these are engaged in the supply of auto components.
Tata Group is one of India’s leading industrial houses and enjoys a reputation as a responsible corporate citizen even prior to independence. Tata Motors Limited (TML), which is part of the Tata group, is seeking to relocate some of its operations related to manufacturing plant for automobile products and components for the manufacture of the small car “Nano” from Singur in West Bengal. Given the Tata Group’s relationship with the State of Gujarat, its standing, both nationally and internationally, and the importance accorded to the Project by the industrial community of India, and the public in general, the State Government has come to the conclusion that in the present situation, it is desirable to have the said operations of the company in the State of Gujarat and do whatever is reasonably possible to provide a congenial environment and pro-active support for expeditions implementation of the Project and its operations.
Type of Loan:
Government of Gujarat (GoG) will provide fiscal incentives to TML in the form of a loan to TML at 0.1% simple interest per annum for amounts equal to the gross Value Added Tax (“VAT”) and Central Sales Tex (“CST”) payable to the GoG (or an equivalent Goods and Services Tax (“GAS”) or any other similar law for the levy of tax in Gujarat, on sale and purchase of goods, as and when introduced, on the sale of the Nano car and its parts and components from the date of commencement of the sale of the Nano car.
Quantum of Loan:
i. The maximum loan amount will be equal to: (a) 330% of the “TML Phase I Investment”; or (b) such amount as has been disbursed to TML by the govt. till the 20th year from the date of commencement of the sale of the “Nano”; whichever is lower. However overall amount of the loan shall in no case exceed the gross amount of tax paid to the GoG in the 20 year period under above mentioned laws.
ii. For the avoidance of doubt, it is made absolutely clear that the TML Phase I Investment shall be related only to the development, manufacture and sale of the Nano car, its components and related activities including the items set out in Schedule I.
iii. It will include the expenditure towards power supply i.e. 220 KV connection (having double circuit – feeding from two sources) up to the Project’s receiving station, as well as final power requirement of the Project in the range of 40-50 MVA. The project would require a separate 66 / 11 KV sub-station (having double circuit-feeding). All the above requirements will be made at the expense of TML, which would constitute a part of the TML Phase I investment. Gujarat, on sale and purchase of goods, as and when introduced), on the sale of the Nano car.
Repayment:
This loan will be repayable in monthly installments starting from the first month of 21st year (from the date of drawdown of such loan amount) of the commencement of first sale of the commencement of first sale of the “Nano”. The loan amount availed in the first month of the first year will be repaid in the first month of the 21st year along with interest and the loan amount availed in the second month of the year will be repaid in the second month of the 21st year along with interest and so on. The repayment will be along with the interest amount for that amount of the principal.
This is issued with the concurrence of Finance Department dated 6-12-2008 and dated 24-12-2008 on this department file of even number.
By order and in the name of the Governor of Gujarat.
P H Jagtap
Section Officer
Industries and Mines Department

Comments

Post a Comment

TRENDING

Advocacy group decries 'hyper-centralization' as States’ share of health funds plummets

By A Representative   In a major pre-budget mobilization, the Jan Swasthya Abhiyan (JSA), India’s leading public health advocacy network, has issued a sharp critique of the Union government’s health spending and demanded a doubling of the health budget for the upcoming 2026-27 fiscal year. 
Post a Comment
»

Delhi Jal Board under fire as CAG finds 55% groundwater unfit for consumption

By A Representative   A Comptroller and Auditor General (CAG) of India audit report tabled in the Delhi Legislative Assembly on 7 January 2026 has revealed alarming lapses in the quality and safety of drinking water supplied by the Delhi Jal Board (DJB), raising serious public health concerns for residents of the capital. 
Post a Comment
»

Zhou Enlai: The enigmatic premier who stabilized chaos—at what cost?

By Harsh Thakor*  Zhou Enlai (1898–1976) served as the first Premier of the People's Republic of China (PRC) from 1949 until his death and as Foreign Minister from 1949 to 1958. He played a central role in the Chinese Communist Party (CCP) for over five decades, contributing to its organization, military efforts, diplomacy, and governance. His tenure spanned key events including the Long March, World War II alliances, the founding of the PRC, the Korean War, and the Cultural Revolution. 
Post a Comment
»

Stands 'exposed': Cavalier attitude towards rushed construction of Char Dham project

By Bharat Dogra*  The nation heaved a big sigh of relief when the 41 workers trapped in the under-construction Silkyara-Barkot tunnel (Uttarkashi district of Uttarakhand) were finally rescued on November 28 after a 17-day rescue effort. All those involved in the rescue effort deserve a big thanks of the entire country. The government deserves appreciation for providing all-round support.
Post a Comment
»

Pairing not with law but with perpetrators: Pavlovian response to lynchings in India

By Vikash Narain Rai* Lynch-law owes its name to James Lynch, the legendary Warden of Galway, Ireland, who tried, condemned and executed his own son in 1493 for defrauding and killing strangers. But, today, what kind of a person will justify the lynching for any reason whatsoever? Will perhaps resemble the proverbial ‘wrong man to meet at wrong road at night!’
Post a Comment
»

Jayanthi Natarajan "never stood by tribals' rights" in MNC Vedanta's move to mine Niyamigiri Hills in Odisha

By A Representative The Odisha Chapter of the Campaign for Survival and Dignity (CSD), which played a vital role in the struggle for the enactment of historic Forest Rights Act, 2006 has blamed former Union environment minister Jaynaynthi Natarjan for failing to play any vital role to defend the tribals' rights in the forest areas during her tenure under the former UPA government. Countering her recent statement that she rejected environmental clearance to Vendanta, the top UK-based NMC, despite tremendous pressure from her colleagues in Cabinet and huge criticism from industry, and the claim that her decision was “upheld by the Supreme Court”, the CSD said this is simply not true, and actually she "disrespected" FRA.
Post a Comment
»

'Threat to farmers’ rights': New seeds Bill sparks fears of rising corporate control

By Bharat Dogra  As debate intensifies over a new seeds bill, groups working on farmers’ seed rights, seed sovereignty and rural self-reliance have raised serious concerns about the proposed legislation. To understand these anxieties, it is important to recognise a global trend: growing control of the seed sector by a handful of multinational companies. This trend risks extending corporate dominance across food and farming systems, jeopardising the livelihoods and rights of small farmers and raising serious ecological and health concerns. The pending bill must be assessed within this broader context.
Post a Comment
»

Climate advocates face scrutiny as India expands coal dependence

By A Representative   The National Alliance for Climate and Environmental Justice (NACEJ) has strongly criticized what it described as coercive actions against climate activists Harjeet Singh and Sanjay Vashisht, following enforcement raids reportedly carried out on the basis of alleged violations of foreign exchange regulations and intelligence inputs. 
Post a Comment
»

A balancing act? Global power rivalry over Iran challenges India’s foreign policy

By Vidya Bhushan Rawat*  A stable Iran is clearly in India’s interest. While US President Donald Trump has so far avoided a direct attack, the situation remains deeply uncertain. The central problem is that few governments take Trump’s words at face value. His actions have revealed a clear pattern: Washington targets adversaries even while pretending to negotiate with them.
Post a Comment
»