Budget: Big incentives on cards for Tata Nano

New Delhi: Is Tata Motors going to use the Automotive Mission Policy to get additional benefits for its people's car? Industry buzz is that Tata Motors Chairman Ratan Tata did bring this up when he met the Prime Minister last month.

When contacted Tata Motors declined to comment on the issue.

So what does the Automotive Mission say that may entitle Nano for fiscal incentives?

The plan says: "The Government may examine from time to time, appropriate fiscal incentives/concessions for innovation of low cost products that are aimed at consumers at the mass market like cost effective small goods carrier, rugged low cost rural vehicle, small safe car, low cost two wheeler etc."

But the mission does not specify what the Government means by mass market, low cost or small and safe.

In Budget 2006, a small car was defined as a car that is four meters long and has an engine capacity of 1200 cc for petrol and 1500 cc for diesel.

But in the Auto Mission, a small car is defined as a car less than 3.8 metres in length and no engine specifications.

So does the Nano meet the "small car definition"? Yes, it complies with the specifications of a small car as defined by the Budget and the auto mission plan.

Can it be pegged as a mass market vehicle? At a little over Rs 1 lakh, that has been Tata Motors claim. Is it a safe small car? Tata Motors says the Nano meets all safety and emission norms.

Will the Government see merit in Tata's claims? That is something which remains to be seen.

The plan is also silent about the nature of fiscal incentives or concessions.

Small cars already enjoy an excise benefit so is there room for more? Interestingly, Tata Motors MD, Ravi Kant is the President of the Society of Automobile Manufacturers (SIAM), a body that lobbies with the Government on behalf of the auto industry.

When contacted SIAM said: "We have asked for a uniform excise cut across all passenger vehicles — to make it 16 per cent from the current 24 per cent and the small car excise benefit, if given, should be over and above the 16 per cent cut we have asked."

Will the aam aadmi's budget make room for the people's car? We will have to wait till 29 February to find out?

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