Though the Madhya Pradesh government has invited Ratan Tata informally for his Nano project, the factory can be accommodated only in the arid area of Rajgarh.  Rajgarh falls on National Highway 3 and 12 and borders on Rajasthan.

The state government, according to insiders, does not have land in prime industrial areas, not even in Pithampur, which is known for its auto-component manufacturing units and a proposed a world-class digital auto testing track.

The state government does not have land in any other location or industrial area either. The Tatas will have to acquire the land privately, which will be another costly affair in terms of investment and social issues.

"Rajgarh is the only location where we have land for the Tatas," a highly placed government official in the department of industry said.

This area has one water source - the Ghora Pachhar river. Spread over 12,000 acres, the land is marked under the category "undeveloped", which means the Tatas will have to stump up at least Rs 300,000 per acre after development.