Car market leader Maruti Suzuki India Ltd (MSIL) will go ahead and finalise plans to set up of a Rs 18,000 crore new manufacturing facility in Haryana before the end of this calendar year with the state government reducing the gross salary cap to Rs 30,000 per month in its 75 per cent job reservation policy for locals, company Chairman RC Bhargava said on Monday.

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According to him, while the industry would have been "happier without the reservation policy", still the positive response of the state government after discussions with various industry bodies and associations has prompted the company to finalise the shifting of its congested Gurugram unit to a new location within the state.

Last week, the Haryana government had notified that a law that provides for 75 per cent reservation in the private sector to job seekers from the state will come into force from January 15, 2022, under the Haryana State Employment of Local Candidates Act, 2020.

At the same time, the upper limit of gross monthly salary or wages under the Act was reduced from the earlier envisaged Rs 50,000 to Rs 30,000.

"Fundamentally, Maruti Suzuki can say that the (Haryana) government has responded positively. We are happy and we will go ahead and finalise the new land where we would move (the Grugram plant) within this calendar year 2021, before the end of December," Bhargava told PTI.

While terming the reduction in the gross salary cap as a "positive development", Bhargava said some details are yet to be worked out.

He said Maruti Suzuki will be looking for a new land within Haryana where it can set up three units with each having annual production capacity of 2.5 lakh units and the overall investment in the new facility will be around Rs 18,000 crore.

Bhargava, however, said it will depend a lot on how the Indian passenger vehicles market grows over the next few years.

When asked how soon the new unit could be operationalised, he said, "It will take at least three years before one unit (at the new location) becomes operational."

MSIL has been planning to shift from its Gurugram manufacturing unit, which is spread over 300 acres because of congestion and traffic hassles. However, the plan was delayed due to the COVID-19 pandemic and move by the Haryana government to bring job reservation policy.

At present, the plant, its first factory, rolls out many of the company's popular models, including Alto and WagonR, with an estimated annual capacity of around 7 lakh units.

On the winding down of the Gurugram unit, he said, "It is not happening in a hurry. We have to first set up at the new location."

Besides Gurugram, MSIL has another manufacturing unit in Haryana at Manesar. Both these units have a combined production capacity of about 15.5 lakh units per annum.

Its parent Suzuki Motor Corp also has a facility in Gujarat with an installed production capacity of 7.5 lakh units per year after the third unit started production in April this year and supplies exclusively to the company.