Tata Motors has issued a rebuttal on Rahul Gandhi’s statement against the Sanand factory. Tata had set up the Nano factory in Gujarat to mainly manufacture the world’s cheapest car. In a political rally ahead of the Gujarat elections, Mr. Gandhi had alleged that the Rs. 33,000 crores were given for the Nano factory, and that he hardly sees the Tata Nano on the road. In its rebuttal, Tata Motors has said that no grant was given to it by the Gujarat government. Instead, a Rs. 584.8 crore loan was given to it.
Here is Tata Motors’ official statement rebutting Mr. Gandhi’s allegations,
The investor friendly environment created by the Government of Gujarat (GoG) encouraged Tata Motors to set-up its manufacturing plant in Sanand, with a long-term vision to make it one of the leading automotive hubs, further enabling Gujarat to contribute to the prosperity and growth of India.
Given the scale of the project and its potential to drive growth in the state, the GoG offered Tata Motors an incentive package in the form of a loan (not a grant), which is to be repaid to the State Government as per the Loan Agreement executed. The loan given to Tata Motors from the GoG is from taxes paid by Tata Motors.
Until now, the State Govt. has given a loan of Rs 584.8 Cr to Tata Motors. Since the establishment of the Sanand plant, there has been a spurt in economic activity and growth in employment (direct and indirect) within the State, making Gujarat one of the key auto hubs within the country with huge employment generation. The project has also given rise to capital investments which has further resulted in the development of incidental industrial activities and employment generation in small and medium scale industries.
Presently, poor demand for the Nano has meant that Tata Motors no longer regularly produces the car at Sanand. Instead, production at Sanand if mainly focused on the Tiago hatchback, which is the most successful car to roll out from Tata Motors in recent years. Tata just produced the 100,000th Tiago from the Sanand factory.
The Nano is being produced only when dealers place orders for it. Tata may also soon discontinue the Nano from the Indian market. Presently, the company is selling the body-in-white (chassis) of the Nano to Jayem Automotive, which is building an electric car called the Neo. The Neo EV is based on the Nano, and will be supplied to app-based cab aggregator Ola.