Archana Dahiwal

Pune: To avoid a Bajaj-like situation, wherein the company closed its Akurdi plant, the Pimpri-Chinchwad Municipal Corporation (PCMC) on Wednesday said it will give octroi concession to Tata Motors on condition that it doesn’t relocate out of Pune.

The concessions will apply to Tata’s new cars, Xenon and Winger, on the condition that the company doesn’t relocate outside the civic body limits.

While Xenon is a derivative of the Tata Mobile, the Winger is touted as the country’s only maxi-van.

Vijaysingh Pardeshi, head of the octroi department at PCMC, told DNA that the decision was taken by the standing committee on Tuesday and will now be put up for ratification by the general body. The octroi concessions will be applicable for five years.

“In the first year of production, there will be a 100% octroi concession, followed by 80% in the second year, 60% in the third year, 40% in the fourth year and finally 20% in the fifth year,” Pardeshi said.

While Pardeshi said the initiative was aimed at attracting more companies to the PCMC belt, civic officials confirmed the decision was mainly taken to avoid a Bajaj-like situation.

Bajaj Auto chairman Rahul Bajaj had recently said that the company’s decision to stop manufacturing at its Akurdi plant was mainly due to heavy octroi and other costs.

“We didn’t want to take any chances this year, particularly after the Bajaj episode, and a slowdown in industrial activities,” said the official. He explained that in 2007-08, the octroi income would have been around Rs 790 crore instead of Rs 760 crore, if there wasn’t a slowdown and had Bajaj continued with its production at Akurdi.

In fact, PCMC commissioner Dilip Band had also expressed concern at the drop in octroi collection while presenting the draft budget recently, saying it has affected the budget size.

Pardeshi said Tata Motors is not the only company to be offered concessions on octroi.

“We are planning to offer a similar concession to all new production units starting from the Pimpri-Chinchwad. This will help arrest industrial migration to other places,” he said.

Source : DNA