ABSTRACT
The inability of the input-output model to deal with issues of income distribution and growth and the incomplete nature of multiplier analysis can be overcome by extending the input-output table to include institutional accounts-income and expenditure of households and other socio-economic groups. In terms of the accounting framework, it involves the mapping of factoral incomes into incomes of various households and institutions. This extended data system with institutional accounts in it is known as the social accounting matrix (SAM). The term ‘social’ as opposed to ‘national’ has special significance which arises from the attempt to classify various institutions according to their socio-economic background (e.g. rural-urban, poor-rich, etc.) instead of their economic or functional activities (e.g. labour-capitalist) alone, as in national and input-output accounts. Since a SAM contains both social and economic data, it provides a conceptual basis to examine growth and distributional issues within a single analytical framework. This is a distinct advantage over the traditional national and input-output accounts which record ‘economic’ transactions alone irrespective of the social background of the transactors.
