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AHMEDABAD: Nano's drive to Sanand from jinxed Singur in 2008 marked the beginning of Narendra Modi's image-makeover - a divisive figure to the `Good M', as Ratan Tata described him
While a one-word (Welcome!) SMS to Tata swung the project to Gujarat, many consider Modi lucky that the small car failed to enthuse the market. Reason: Modi's largesse to bring the beleaguered project to Gujarat would have cost the state exchequer a bomb had the car clicked. Estimates say that at full-steam production, the sops would cost Gujarat government over Rs 30,000 crore over 20 years. That never happened be cause Nano sales are not even 10% of the planned capacity of 250,000 cars per year. Its sales in 2014-15 were a meagre 16,903 units. In the last three years, Ta ta Motors has been given Rs 479.50 crore loan against VAT paid by the company . According to sources, a claim of anoth er Rs 150 crore loan against VAT is pending. The figure would have run into thousands of crores of rupees if the car sales had met the lofty projections.
Having failed to revive a flagging Nano, Tata Motors has demanded afresh last week that the enviable sops be extended to other car models it plans to manufacture from Sanand. Under added pressure, after the recent flight of General Motors to Maharashtra, Gujarat government finds itself in a Catch-22 situation: if it agrees to Tata's terms, other auto companies like Ford and Maruti would demand the same. "If Tata Motors moves out of Gujarat, it will further vitiate the investment climate which has already taken a hit following the Patidar stir," said a senior Gujarat government functionary .
"The company recently approached for availing the same soft loan benefits for models other than Nano. As per the agreement, the incentives were specific to Nano only . The company is currently getting soft loan amount at 230% of the gross VAT paid. Other auto companies get 100% of VAT refund," said Arvind Agrawal, additional chief secretary , industry & mines department, Gujarat.
"We continue to evaluate best suited locations for existing and new products and work closely with relevant regulatory and government stakeholders for necessary sup
ports.However, these plans and discussions are necessarily confidential," a Tata Motors spokespersons said in emailed reply .
While a one-word (Welcome!) SMS to Tata swung the project to Gujarat, many consider Modi lucky that the small car failed to enthuse the market. Reason: Modi's largesse to bring the beleaguered project to Gujarat would have cost the state exchequer a bomb had the car clicked. Estimates say that at full-steam production, the sops would cost Gujarat government over Rs 30,000 crore over 20 years. That never happened be cause Nano sales are not even 10% of the planned capacity of 250,000 cars per year. Its sales in 2014-15 were a meagre 16,903 units. In the last three years, Ta ta Motors has been given Rs 479.50 crore loan against VAT paid by the company . According to sources, a claim of anoth er Rs 150 crore loan against VAT is pending. The figure would have run into thousands of crores of rupees if the car sales had met the lofty projections.
Having failed to revive a flagging Nano, Tata Motors has demanded afresh last week that the enviable sops be extended to other car models it plans to manufacture from Sanand. Under added pressure, after the recent flight of General Motors to Maharashtra, Gujarat government finds itself in a Catch-22 situation: if it agrees to Tata's terms, other auto companies like Ford and Maruti would demand the same. "If Tata Motors moves out of Gujarat, it will further vitiate the investment climate which has already taken a hit following the Patidar stir," said a senior Gujarat government functionary .
"The company recently approached for availing the same soft loan benefits for models other than Nano. As per the agreement, the incentives were specific to Nano only . The company is currently getting soft loan amount at 230% of the gross VAT paid. Other auto companies get 100% of VAT refund," said Arvind Agrawal, additional chief secretary , industry & mines department, Gujarat.
"We continue to evaluate best suited locations for existing and new products and work closely with relevant regulatory and government stakeholders for necessary sup
