Chairman Ratan Tata drove the long-awaited car on to the stage at the Auto Expo in the capital and announced that it would have a dealer price of Rs 1,00,000 as promised five years ago, even though commodity prices had gone up. "That's because a promise is a promise," Tata said.

The car, a hatchback with a 624cc engine, is priced at about half that of the current cheapest car in the market, and is a sharp contrast to the luxury Jaguar and Land Rover brands that Tata is negotiating to buy from Ford Motor.

The Nano will come in three variants -- standard and two deluxe models with AC. The standard car would be available for Rs one lakh (ex-showroom), while VAT and transportation costs are extra.

While critics had been sceptical throughout about the car meeting safety and emission norms, coming as it is at that price, Tata said he was happy to announce that Nano meets all norms as would a modern car.

The car is eight per cent shorter than Maruti 800 on bumper to bumper length, but is 21 per cent more spacious, claimed Tata.

Alluding to fears expressed by environmentalist R K Pachauri and green activist Sunita Narain that the car at that price would add more vehicles on the road leading to higher vehicular pollution, Tata said the 624 cc, 33 HP petrol engine meets Bharat Stage-III emission norms and can also meet the Euro 4 norms.

"Pachauri will not have a nightmare and Sunita Narain can also sleep," he quipped, while recalling that some people had suggested that the car should be called 'Pachauri' and some others said that it should be named 'Mamta' – probably referring to the position TMC leader Mamta Banerjee had taken against the setting up of the small-car project at Singur in West Bengal.

Commenting on the safety standard, he said the car has gone through a full frontal crash test as per norms.

The business baron silenced his critics 10 years ago when he unveiled Tata Motors' first car, the Indica hatchback.

His business acumen was again questioned as the truck and former locomotive maker hatched plans to build the world's cheapest car and buy Ford Motor Co's premium Jaguar and Land Rover brands.

But Tata has remained steadfast and successful: the Indica has sold more than 1 million units and Tata Motors has emerged as the preferred bidder for the luxury Ford brands.

On Thursday, the 70-year-old chairman of the Tata Group unveild the "People's Car", a mini 4-seater priced, as promised five years ago, at Rs 1,00,000 (dealer price), less than half the price of the cheapest car on the market.

"I have confidence in what we can do, provided we are critical enough about what we can do and we have a desire to improve," Ratan Tata had said in an interview.

"You have to have a belief that you can do something. You have to carry that belief through till the end or decide not to do it. What we should not do is a half-hearted job," he said.

The automotive world has taken note. Volkswagen, Toyota, Honda and Fiat have since said they are looking to build low-cost cars. On Tuesday, Ford said it would invest $500 million in India to make a small car.