It has been panned by green activists and belittled by rivals, but Tata Motors [Get Quote] Rs 100,000 car to be unveiled at the Auto Expo in New Delhi on January 10 won words of praise from Finance Minister P Chidambaram on Tuesday.

At pre-budget consultations with industrialists, Chidambaram praised the car from the Tata stable for innovation as well as sourcing most components from indigenous vendors, according to sources present at the meeting.

Unlike other cars in India, the 660 cc vehicle will sport a rear engine and would be gearless.

The Rs one lakh car, announced three years back, is finally slated for commercial launch some time in September, as was promised despite a spate of agitations in its Singur plant.

Initially, it would be rolled out from Singur plant, but Tatas intend to launch it from other units as well. The government had cut excise duty for small cars from 24 per cent to 16 per cent in the 2006-07 Budget, with the intention of making India the hub for small four-wheelers.

Manufacturers have now started demanding a further cut in the coming Budget.

Tata Group chairman Ratan Tata was not present during the consultations between industrialists and the finance minister, nor were any other auto players.