Application of ‘Multiplier’ as a Tool for Unraveling the Potential of a Sector in the Regional Economic Development: A Case Study of Orissa

This paper is an effort to understand the inter-dependence of different sectors of the economy of Orissa in an input-output framework. The economy is divided into 23 sectors and the technology matrix is obtained for the state. With the help of this matrix, an attempt is made to identify the sector with maximum potential to generate a sequence of development. There are different types of multiplier impact, which an investment can generate. These are output multiplier, income multiplier and employment multiplier. The specific requirement of a plan may need emphasis on a particular type of multiplier. A composite index of multiplier can also be computed to know the overall impact. The output multiplier reveals the importance of industrial sectors in general; the employment multiplier laid importance on food processing industries and the employment multiplier emphasizes the importance of basic chemical and chemical product industry.