Lure of free public money many times its investment made Tata shift Nano plant to Gujarat.

Tata was given sops estimated to be worth Rs. 30 Thousand Crores over a period of time for investing only a fraction (Rs 2 Thousand Crores) in Sanand, Gujarat. That’s what brought Nano to Gujarat.


Modi’s sops to Tata for Nano Plant : Rs 30 Thousand Crores (estimated, on interest free loans and other sops)

The details have been made known through a government resolution dated January 1, 2009, listing the incentives offered to the Tatas. The group has been given 1,100 acres in Sanand, 35km west of Ahmedabad.

According to the agreement with Tata Motors, the government has decided to give the company a loan of Rs 9,500 crore for 20 years at 0.1 per cent rate of interest. By contrast, the CPM regime in Bengal had offered a subsidy package which included subsidies on land, power, tax paybacks and a soft loan of Rs 200 crore.

The Gujarat resolution is, however, silent on the existing policy of the state on 85 per cent job opportunities to local people.

Tata Motors’ investment in Sanand Plant Gujarat : Rs 2 Thousand Crores

Spread over about 1,100 acres, the plant in Sanand has been created at an investment of about Rs 2,000 crore.


Modi’s starting gift to Tata for Nano plant
Free public money in form of Rs 9,570 Crore loan as the interest is 0.1% and payment time is 20 years (23% of Gujarat’s budget for that year).
Plus, usual sops of tax and duty exemption, infrastructure development and 100 acres of land near Ahmedabad for township.

Which businessman will refuse such a deal?


Its “free” money that’s attracting, not Modi.

Gujarat government have already approved the interest free loan exceeding Tata’s investment.

According to a top official, a Gujarat government committee has approved a provisional loan of Rs 2,138.85 crore at 0.10 per cent annual interest, but the company’s demand is much higher.

Every effort is being made by Feku’s government to keep details of Feku-Nano deal outside public preview.

Despite several RTI applications, the government refused to divulge information on the pretext that it contained ‘trade secrets’ of Tata Motors. Unfortunately for the company, details of this deal got leaked out in the form of a cabinet note by Industry Department Deputy Secretary Shobhna Desai and now an internal inquiry has been initiated to find out how the details of the deal went public.

The famous argument of cascading effects of the plant, that will create employment and economic activity, is now a bad joke on people.

The same plant if relocated to any other place in India, the effects would have been same (say Tata expanded it’s Pantnagar plant). Here a CM has lured away Nano plant using huge amount of money directly from Gujarat government’s coffers. What has the state gained till now, Nano has failed, Tata Motors’ Sanand plant stays idle (April 2003 plant utilization was mere 4.5%), so have “cascading effects of the plant”.


The 2 Billion Dollar boom town.

An counterexample of a “real” success story, whoever heard of ND Tiwari, must have heard of wrong reasons.

2002 to 2006 (four years) Pantnagar, Uttarakhand, 2 Billion Dollars invested, not proposed, at a fraction of sops offered by Gujarat.


After all, India Inc is pumping in well over $2 billion in the Pantnagar Integrated Industrial Estate on the outskirts of Rudrapur. The sugarcane and paddy fields have given way to pre-fabricated industrial structures. Sturdy Sikh farmers atop tractors have had to make way for senior executives in cars and SUVs. The buzz of a boomtown is unmistakable.

In the last two years, 397 plots have been sold at Rudrapur to set up industrial units. The list of buyers includes top companies like Tata Motors, Bajaj Auto, Escorts, Voltas, Britannia, Nestle, Parle Biscuits, HCL, Hewlett-Packard, Dabur, Kores India.

India is growing, even poor old UP can boost of growth in high-tech industries Uttar Pradesh, Uttarakhand lead in high-tech manufacturing.

Furthermore, Sanand after 5 years, so far only Maruti (2015) and Ford (2014) have confirmed investments. Even after humongous “free public” money doled, as of now, at best Sanand is huge hype.

In absence of a lokayukta for the last one decade, corruption in Gujarat has really flourished.

The government also doesn’t want to tell the public that all the promises of employment to locals might as well be forgotten now that Nano is in a free fall. However, the real deal is still in the dark. Besides appreciating Modi’s investment-friendly policies and telling the nation that he is PM material, one might wonder what else Tata had to dish out to get this dream deal which might have cost the state in excess of Rs 30,000 crore for a mere 2000-crore investment! In absence of a lokayukta for the last one decade, corruption in Gujarat has really flourished.



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