Complementary Action to Megaprojects through the Promotion of Small and Medium Enterprises: Ensuring Positive Impacts for the Local Economy


Policy Brief - 2014


By Arthur Cessou

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For more than a decade, metropolitan Chennai (ex-Madras) has been the site for major international projects, encouraged by the regional Government of Tamil Nadu, in order to make the city region a global economic hub. Large-scale production platforms, built around international investment projects (Ford Motors, Hyundai, Saint Gobain, Nokia, …), have been erected, one of the most significant examples being the Mahindra World City in the South of the city. Parallel to this development, but less dramatically, Tamil Nadu has initiated since the early 2000s a significant reorientation of its policies in favour of micro, small and medium enterprises (MSMEs). The development of this sector is gaining increasing importance in efforts to promote economic and industrial development.


Megaproject building in Chennai has raised concern about the real benefits for the population and the local economy. New specialisations have emerged, particularly in the fields of IT technology and the automotive industry, but policy-makers are under pressure to show proof that public investments are creating new jobs, and not only for a minority of educated people. Moreover megaprojects can have negative impacts on local enterprises, which are affected by the current industrial restructuring process. It is therefore expected that the government will provide support to small units in this phase of transition.


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Chance2Sustain Policy Brief Series - ISSN 2305-5960