Tata Motors has secured a significant ₹766 crore arbitration award from the West Bengal Industrial Development Corp. Ltd (WBIDC), concluding a prolonged dispute stemming from the closure of its Singur plant in 2008. This plant was intended for manufacturing the Nano, the world’s most affordable car.
Background
- Singur Plant Closure: Tata Motors shut down its Singur plant due to protests against land acquisition in 2008, where it planned to produce the Nano model.
Arbitration Award
- Amount: The arbitral tribunal awarded ₹766 crore to Tata Motors.
- Interest: WBIDC is to pay an 11% interest rate on this amount from September 2016 until full recovery.
- Proceedings Cost: Tata Motors is also entitled to recover ₹1 crore towards the cost of the proceedings.
Significance
- Test Case: The Singur dispute is seen as a pivotal case for land acquisition and industrial development in India.
- Political Impact: The conflict led to the fall of the Left Front government in West Bengal, as Mamata Banerjee’s Trinamool Congress capitalized on opposition to land acquisition, ending the world’s longest-ruling democratically elected Communist party.
Tata Motors’ Relocation
- Tata Motors initially invested in the Singur project to create the “people’s car” at an affordable ₹1 lakh price tag.
- The company moved its manufacturing unit to Sanand, Gujarat, after abandoning the Singur project in 2008.
- The Sanand facility still operates for other Tata Motors passenger vehicles after the Nano project was discontinued in 2018.
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