Maharashtra govt woos Nokia with sops

Mobile major in talks with government for investing Rs 765 crore

Global mobile handsets major Nokia is in talks with the Maharashtra government on investing $175 million (about Rs 765 crore) for setting up a manufacturing unit on a 150-acre plot of land at Airoli in New Mumbai.

In the event of adequate land, as per Nokia's requirements, not being found at Airoli, the state government has suggested Anjanwadi in Pune as an alternative site.

At least three other states "" Tamil Nadu, Karnataka and West Bengal""- too are also aggressively pursuing Nokia to set up base there and have offered a deferment of sales tax, among other incentives, to the company.

Last week, Maharashtra chief minister Vilasrao Deshmukh met a Nokia team and assured it that the state would match, if not better, offers made by any other states.

A senior state government official said: "There has been a paradigm shift in our approach to attracting foreign investments to the state. The moment Nokia announced its intentions to set up a manufacturing base in India as against expanding its existing unit in China, not only Maharashtra but Tamil Nadu and Karnataka as well started approaching the telecom major, instead of waiting to be formally approached."

The official added that the Maharashtra government established contact with Nokia through various sources, including Wakeman and Cushfield, the real estate consultants, which was retained as advisors by Nokia.

"On the status of the discussions held so far I can only say that things are not finalised yet. Things are as they stood at the time of the last meeting. There is no move ahead nor backwards."

Apart from sales tax deferment, Nokia has sought certain infrastructural requirements such as widening of the approach roads to the Airoli site, better power supply, a sewage treatment plant and an increase in its land requirement.

Similarly, the company is seeking information on the impact of the value added tax (VAT) regime on its manufacturing business plans.

"The company was initially seeking to purchase around 100 acres of land. It has now stated that since it also has to accommodate several vendors at the site, its requirement would be in the range of 150 acres. We have asked for its shopping list and promised that we won't be found lacking in meeting all its requirements," the official said.

During the last meeting officials from Nokia informed the state that they were being wooed by West Bengal with special incentives.

The state government has asked the company to furnish a copy of any written assurances made by other state governments on any incentives that will then be matched by Maharashtra.