Ford Motor Company had its way in the Indian Automobile market, but recently, Ford announced the closure of its Ford factory in Maraimalai Nagar, Tamil Nadu. This came as a shocker to the state and the country and especially the employees working for Ford, TN. To mitigate the pain that arose out of the closure of the Ford factory, the Tamil Nadu government has come forward with an offer.
The TN government is willing to offer the same financial benefits to any new investor in the asset as it would offer a manufacturing entity setting up a greenfield plant in TN. Having fiscal benefits, if the investment is substantial, the government will be willing to offer these benefits to whoever buys the Ford factory.
Not only this, but the government will also allow and fast-track all the necessary approvals to ease the process of sales and in an effort to bring a quick resolution to the issue.
The fact that the Maraimalainagar factory employs around 2,000 people, the government’s decision is to provide support to the sale process, and these employees will be a part of the people-plant package that will be offered to the buyer.
The fiscal benefits offered by the government of Tamil Nadu to micro, small and medium enterprises include:
- A VAT subsidy for the first six years of production
- The special capital subsidy of 15% on plant and machinery for thrust sector companies, including auto
- 20% subsidy on power consumption for first 36 months
- 50% rebate on stamp duty and registration charges
- 15% plant and machinery value as subsidy for thrust sectors like auto
- 3% of interest on term loans for technology up-gradation and modernization, among others.
