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The Gujarat government admitted in the Assembly that it had paid Rs 456.79 crore (Rs 4.56 billion) as a "loan" to Tata Motors to set up its Nano plant near Sanand in Ahmedabad district.
During Wednesday’s question hour in the Gujarat Assembly, senior Congress MLA Shaktisinh Gohil sought details about loans given to Tata Motors for its Nano plant under the agreement signed between the company and state government on January 2009.
In her written reply, Gujarat Chief Minister Anandiben Patel who handles the industries portfolio, stated that as on January 31, 2015, the Gujarat state government had paid Rs 456.79 crore as a "loan" to Tata motors to set up its plant.
CM's reply stated that out of this, Rs 167.20 crore was paid in 2012-13, Rs 252.34 crore was paid in 2013-14 and Rs 37.25 crore was paid in 2014-15 (as on January 31, 2015).
Gohil also raised a query about allegations of breach of contract by Tata Motors and asked the government to provide details about action taken against the company by the government based on the report submitted by a high-level monitoring committee.
Replying to the second query, Patel stated that no such report has been prepared or given to the government by the committee and so there is no question of taking any action against the company.
The Congress has been critical of the Gujarat government's assistance to Tata Nano plant. During a House discussion on budget allocations for Labour and Employment department on Wednesday, Congress MLA from Sanand, Karamshi Patel alleged that Tata Motors does not employ local youths in its plant, which is a violation of the agreement.
The Congress MLA from Sanand, suggested that instead of giving land and financial assistance to such large companies which do not employ locals, the government should help small industries.
He also claimed that the Nano is no longer manufactured at the Sanand facility, which is also a violation of agreement.