What made the Tatas chose Singur?

Tata Motors has plans to invest about Rs 1,500 crore at Singur with the vendors bringing in another Rs 500
crore. The plant was to have a capacity of 2.5 lakh units a year on a two-shift basis, going up to 3.5 lakh units on
three shifts. In addition, it would have vendors and act as a mother plant for many aggregates to the tune of five
lakh cars a year.
A comprehensive package of incentives — subsidy on land, concessional power, a soft loan and tax
paychecks— to match the benefits that Tata Motors would have got in Uttarakhand or Himachal Pradesh, was
what got it to choose Singur in West Bengal for making its low-cost car Nano.
The agreement between Tata Motors, West Bengal Government and the State industrial promotion agency —
West Bengal Industrial Development Corporation — available on the corporation’s Web site, provides details of
the incentives offered.
Soft loan: According to the agreement, the West Bengal Government will provide Tata Motors a loan of Rs 200
crore at 1 per cent interest, repayable in five equal annual instalments starting from the 21st year from the date of
disbursement of the loan
Concessional power: The Government will provide electricity for the project at Rs 3 a kWh. In case the tariff is
increased by more than 25 paise a unit in every block of five years, the Government will provide relief through
additional compensation to neutralise the increase.
Subsidy on land: The West Bengal Industrial Development Corporation (WBIDC) will provide 645.67 acres of
land to Tata Motors on a 90-year lease, on an annual lease rental of Rs 1 crore a year for the first five years, with
a 25 per cent increase after every five years till 30 years.
Tax paychecks: The agreement says that WBIDC will provide an industrial promotion assistance in the form of a
loan at 0.1 per cent per annum for amounts equal to gross value-added tax and Central Sales Tax received by
the State Government in each of the previous years ended March 31, on the sale of the small car from the date
the sales begin.