Calcutta, Oct. 10: Buddhadeb Bhattacharjee’s government made it clear today that it was giving the Singur plot to Tata Motors at a concessional rate and that the company was not expected to cough up the Rs 140 crore compensation the government was paying to displaced farmers.

Commerce and industries minister Nirupam Sen said the Tatas were being given a concessional lease as the government is under pressure to ensure that they invest here.

“We were competing with states like Uttaranchal and Himachal Pradesh, which were offering exemptions in excise duty and income-tax. We had to make them a concessional offer,” Sen said.

The minister, however, refused to divulge how much concession the government was allowing Tata Motors, saying that negotiations were still on. He also did not specify what the lease tenure would be.

The company will not have to bear the burden of the landlosers’ compensation because the plot is being given on lease.

The government had earlier claimed that Tata Motors would reimburse the government for the money spent on land acquisition.

Commerce and industries secretary Sabyasachi Sen had said that the West Bengal Industrial Development Corporation (WBIDC), which acquired the land, would pass it on to Tata Motors at the same rate. “We’re not going to keep any margins over and above the cost of acquisition. We’ll pass on the land to the Tatas for the same price.”

Tata Motors officials declined comment today. “The Bengal government is in the best position to respond,” said a spokesperson.

However, Tata Group sources said a “controversy” at this stage was unwarranted as it would send wrong signals to other investors. “Tata Group is not a fly-by-night operator. It has a history of 100 years.”

The official added that the small-car unit in Singur, about 40 km from Calcutta, would have a multiplier effect on the Bengal economy.

“We’re not buying the land, only leasing it. The land will officially still belong to the government,” the Tata official said, indicating that the car manufacturer could not be expected to pay the Rs 140 crore that the government is spending on its acquisition.

Land and land reforms minister Abdur Rezzak Mollah said that according to norms, taking a land on lease should cost almost the same as buying it. “According to lease norms, we charge 95 per cent of the market value of land as upfront payment. This is in addition to khajna (land revenue),” he said.

Asked what the Tatas are paying for it, the minister said: “I don’t know. We haven’t conducted any transaction with them directly, but through the WBIDC.”

Mollah’s department has received a letter of credit from the WBIDC for the acquisition cost and has paid out more than half the land claimants.

Asked if his government was giving land virtually free of cost to the Tatas, chief minister Buddhadeb Bhattacherjee flared up.

“Don’t ask me such questions,” he told reporters at Writers’ Buildings. Later in the day, he added: “The Tatas do not do business that way. We have got into a package deal with them.”