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Chilika Lagoon, located in Odisha, India, a wetland of international importance, underwent a hydrological intervention in 2000 to restore its earlier degraded ecosystem. This ecological restoration program not only improved the environmental conditions of the lake but also enhanced business of fisheries and tourism associated with the lake. While many studies have focused on the environmental assessment of this restoration program, a few have analysed its economic impacts and benefits. However, none were found to have estimated the ripple economic impact generated from the augmented ecosystem services as a result of this restoration. This literature gap in the field of restoration economics is intended to be addressed in the study by estimating the multiplier effect of the hydrological intervention on the economic output and employment. This estimation is carried out using Multiplier Analysis under the framework of Input-Output Modelling for which secondary data is used. The analysis involves two types of multipliers; Type I which estimates direct and indirect impact, and Type II which estimates the total impact, including induced impact besides direct and indirect. The results from the analysis demonstrate an increasing trend in the value of fisheries and tourist expenditure in Chilika and a resulting significant multiplier impact on the economic output. Moreover, the employment generation potential of ecological restoration also turns out to be quite substantial. The estimates show that in the post-restoration period of 10 years, it spurred economic activity worth 9 billion in terms of economic output throughout the economy, while generating 33,384 direct, indirect, and induced jobs as a ripple effect of the ecological restoration. This study concludes that ecological restoration acts as an ‘economic catalyst’ and has an exceptional ability to push the poor and backward areas into a virtuous circle of development. It, therefore, foregrounds the importance of ecological restoration in poverty-stricken countries like India.
Keywords: Chilika Lagoon, Ecological Restoration, Restoration Sector, Input-Output Modelling, Multiplier Analysis, Economic Impact.
