Sunday, September 14, 2008

Subsidies, tax breaks got Tata to Singur

The agreement between Tata Motors and the government of West Bengal to
manufacture the world's cheapest car in the state involved much more
than subsidies on land and interest paid on bank loans.

The government worked out a package — which included tax paybacks and
concessional power — to match the benefits the plant would have
enjoyed in Uttarakhand and Himachal Pradesh, both designated backward
areas that attracted central tax concessions.

The documents, which the West Bengal government released today, show
that the state government will provide to Tata Motors a loan of Rs 200
crore at 1 per cent interest per year repayable in five equal annual
installments starting from the 21st year of the date of disbursement
of loan.

If the state had put the sum in a fixed deposit scheme, its principal
would be worth Rs 3,000 crore in 20 years.

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