It's official now. The Tata Motors most eagerly-awaited project to manufactue a family car costing just a little over 2,000 US dollars will be set up in West Bengal by 2008 with an investment of Rs 1000 crore, Tata Group Chairman Ratan Tata said.

A prototype of the four-door five-seat car to be manufactured at the West Bengal plant is undergoing tests at a Tata facility in the western Indian city of Pune, Tata told media persons after a meeting with Bhattacharjee in Kolkata.

Tata's announcement assumes significance as some in India's automobile industry had expressed skepticism if such a cheap car can be made with viability.

Currently, Maruti Udyog Limited, a joint venture between Japan's Suzuki Motor Corporation and Indian government, manufactures the cheapest car in India -- an 800 CC compact hatchback --that sells for about 5,000 dollars.

Asked if the Tata Motors would be able to stick to its 2,000 dollar-odd price tag as promised, Ratan Tata said, "We hope to do that."

The Tata Group chairman said the car with rear engine would be available from 2008 in both diesel and petrol variants and the project would create 10,000 jobs at the plant and vendor chains.

It was not clear if the company would sell the car in overseas market.

"West Bengal is one of the most industry and investment-friendly states and I think some one has to turn this belief into reality. We look forward to the opportunity of revitalising the automobile industry in the state," Tata said.

Beside the car project, Tata also announced that Telco Construction Equipment, a subsidiary of Tata Motors, would set up a Rs 250 crore heavy automobile equipment manufacturing unit at Kharagpur in West Bengal.

Ratan Tata said the group's investment in the state would send a positive signal to other investors.

Buddhadeb said, "We have already prepared a fiscal incentive package for the Tatas which is comparable to other states. Land acquisition for the two projects of the Tata would be over in two to three months."

The Videocon Group Chairman Venugopal N Dhoot also met Buddhadeb and later announced Rs 900 crore investment in West Bengal --a Rs 100 crore liquid crystal digital television manufacturing unit and a Rs 800 crore information technology park in Kolkata. The two projects would generate employment for 25,000 people.

"This is for the first time any company in India will start manufacturing LCD TVs. This will be the sixth LCD TV manufacturing unit in the world. The LCD TV technology is much more advanced than plasma TV technology," said Dhoot whose company acquired multinational Thomson's colour television tube plants worldwide two years ago.

Videocon has tied up with a Japanese company for technical expertise for the proposed project in Kolkata. He declined to name the Japanese company saying there is a confidential agreement between them.

At present, Videocon Group manufactures colour televisions, air conditioners, washing machines, microwave ovens at its unit in Salt Lake in Kolkata, which was taken over from Philips India in 1999.