The economy of Dhenkanal is solely dependent on the industries. However the industrial development of Dhenkanal is initiated in the post independence period of implementing plans. To buoy up the shattered economy right at the post independence era, during implementing plans, Government founded the District Industries Center (DIC), Dhenkanal being added within the jurisdiction of the department on 1st August 1978.

To build up a strong foundation of the economy of Dhenkanal, the first and foremost job undertaken by DIC was to identify the Small Scale Industrial (SSI) units, which were suffering due to the scarcity of adequate funds and effective infrastructure. Identification of the prospective entrepreneurs was also a significant aim of the DIC. To prop up the economy of Dhenkanal, right after the identification of SSI units and the entrepreneurs, the DIC issued permanent and provisional Registration certificates and recommended OSFC to provide bank loans to those SSI units. The DIC also involved a bulk of local workforce to those SSI units. Thus the SSI units at the first phase of economic development aided Dhenkanal dually- providing employment to the local workforce and supporting the domestic economy. To maintain a sustainable economic growth, the government approached marketing support to those units and at the same time adopted various measures to revive the sick industries. There is a genesis in the socio-economic standard of Dhenkanal due to the promotion of the cottage and the handicraft industries in the village, which maintained the rural economic augmentation in Dhenkanal to a sustainable rate. However the implementation of Self Employment Program and Khadi and village industries Board accentuate a rapid development of the village economy. The promotion of SSI units and the village economy was the foremost step adopted by the government during the first step of economic development.

To promote the economic development in Dhenkanal, Government in Dhenkanal provides five industrial estates or areas to the prospective entrepreneurs. The allotment of the industrial estates in Dhenkanal was established by IDCO. The IDCO also provides land to the PSI units (Panchayat Samiti Industrial co-operative Societies). Presently there are two PSI units functioning in the district of Dhenkanal, which contributes to the economy of Dhenkanal. The State Government of Orissa has invested funds in the PSI units in the form of share capital, to meet the economic demands of these units. The principal objective behind setting up the PSI units is to provide employment to the local artisans and improve the economic condition of the rural folk of Dhenkanal.

Moreover the natural endowments of Dhenkanal are helpful enough for the development of the financial standard in Dhenkanal. The raw materials available from agriculture, forest and minerals help to accentuate the economic development in Dhenkanal. Dhenkanal is well connected with the effective road network supported by N.H.-42, N.H.-200 and railway line to other commercial centers of the state; hence that serves the economy of Dhenkanal also.

In the later phase of the economic development, the Government employed the scheme of Prime Minister Rojgar Yojna in the financial year of 1993-94 in the urban areas and from 1994-95 both in the rural and the urban areas to provide Self Employment to the educated unemployed youth. By providing economic support to the youth folk was the key instrument to generate a socio-economic genesis in the district of Dhenkanal.

Though the promotion and the revival of the sick industries including the handicraft and the cottage industries was initiated by the Government during the first phase of the commencement of financial years, village handicraft and the cottage industries have come up as a significant contributor in the economic scenario of Dhenkanal, only in the recent years. With the assistance of the district DIC, handicraft industries are provided with funds as a share capital, for purchasing of tools and equipments construction for showrooms and godown. Under the rehabilitation of the handicraft schemes, the artisans are provided with finance and marketing support. Nowadays the artisans are given training to exploit the modern technology and scientific measures to upgrade the quality of their handicraft products.