Tata, Mahindra, Volkswagen and Bajaj to invest Rs 11,510 crore in Maharashtra

Homegrown manufacturers like Tata Motors, Mahindra and Bajaj along with German automaker Volkswagen signed four agreements with Maharashtra government to invest Rs 11,510 crore. Maharashtra state Chief Minister Prithviraj Chavan, state industries minister Narayan Rane, Anand Mahindra Chairman M&M, Ravi Pisharody Executive Director for commercial vehicles Tata Motors and Pankaj Gupta, Executive Director Volkswagen were present on the occasion.

As per the agreements, Volkswagen will invest Rs 1,510 crore while Tata Motors and Mahindra will each spend Rs 4,000 crore. Bajaj Auto also agreed to invest Rs 2,000 on the existing facilities.

Moreover in the 2011, the state government imposed the VAT Act which is applied on the net sales and not on gross sales. With this VAT in force, many automakers had said that such tax system jeopardized the competitive advantage of Chakan-Talegaon auto hub and some of them even threatened to pull the investment out at that juncture. However, things seem to get more sublime as per CM's quote.

Chief Minister Chavan said "It was an error of judgement at that time" and further added that tweaking of VAT norms will help the industry.

Mahindra said, "We have already invested Rs 4,000 crore in the Chakan plant so far and are looking at investing an additional Rs 4,000 crore during next seven years."

With the new investment pouring, the job opportunities will also increase. Mahindra's investment of Rs 4,000 crore will create 2,500 jobs while Tata Motors will further add jobs for 1,200 people. Furthermore, with the German investing Rs 1,510 crore, there will be new 570 openings in the Volkswagen plant.

In a bid to pour more investment in the state, the Chavan government in February signed 32 agreements with companies such as Bosche, Mercedes, Shree Uttam Steel and more, totalling an investment of Rs 23,850 crore.