Sectoral Spillovers of an Automobile Cluster :

The agricultural sector is the backbone of Madhya Pradesh’s economy, contributing roughly a quarter of the Gross State Domestic Product (GSDP) and employing more than 65 per cent of the state’s population. Historically associated with economically lagging regions, Madhya Pradesh adopted a growth centre strategy to promote industrialisation, under which Pithampur emerged as a major automobile manufacturing cluster. As this cluster has altered the economic landscape of Pithampur, this study examines its impact on selected tertiary sectors within its host district, Dhar. Using District Gross Domestic Product (DGDP) data for the period 2011–12 to 2016–17 and a regression-based analytical framework, the study evaluates the relationship between automobile manufacturing and key service activities, including trade and hospitality, transport and storage, financial services, and real estate-related activities. The findings reveal differentiated sectoral linkages. Service sectors closely associated with goods movement and routine consumption exhibit stronger associations with automobile manufacturing, while higher-order services such as financial and real estate activities show limited responsiveness at the district level. These results highlight the selective nature of industrial spillovers from a planned manufacturing cluster and underline the need for sector-specific policy strategies rather than assuming uniform service-sector growth. The study offers policy-relevant insights for planners and stakeholders seeking to promote balanced regional development in less-developed regions.