Even as the Tatas have suspended work at their Nano plant in Singur, IT major Infosys [Get Quote] said on Monday it is watching the developments closely and would reconsider its plans in West Bengal if needed.

Infosys' views followed Tata Motors' [Get Quote] announcement earlier in the day that they would keep work suspended at the Nano plant.

Reacting to the developments, Infosys' Human Resources Chief Mohandas Pai said, "Singur has created a fear in the minds of India Inc. We have neither pulled out nor are planning to. We will rethink and reconsider the situation if need be," he added.

Earlier in the day, a private TV channel had reported that Infosys was rethinking about its plans in the state in the wake of the Singur controversy.

"Singur has happened and we have seen what the impact is. It is sad about what has happened in West Bengal. People are scared, employees are scared. It is causing a rethink at this point of time, for all companies in India," NDTV 24x7 quoted Pai as saying.

He said the fear element was high in the state and anyone not agreeing with the government could create a problem.

"We have seen what is happening there and obviously, there is a fear psychosis," Pai said, adding, "It will take some time for anybody to come to a conclusion."

In April this year, Infosys announced plans to set up a development centre in Rajarhat, on the outskirts of Kolkata. Wipro [Get Quote], too, agreed to expand its presence in the city.

Infosys' proposed development centre in Rajarhat will be an SEZ. The company initially plans to spend up to Rs 500 crore (Rs 5 billion) on building it.

"This would be one of our largest centres," Infosys' chief executive and managing director S Gopalakrishnan said after he and his colleague T V Mohandas Pai, director, Infosys, met West Bengal's chief minister Buddhadeb Bhattacharjee.