IMPORTANCE OF ECONOMIC INFRASTRUCTURE

Economic infrastructure is the nerve centre of the economic system. It plays an

important role in the development of not only the economy but of the civilization as
well. It is a public utility service which gives place and time utility to goods and services.
They link production, distribution centres and the end consumers as well. Therefore,
infrastructures bring together the elements of the economic system.

To conclude, let us discuss some of the prime importance of infrastructures.

i. They help in the development of the market and all the elements within.
ii. It also facilitates large-scale production for the purpose of smooth functioning of
the economy.
iii. They result in the territorial division of labour which is great.
iv. They also ensure price stability in the market.
v. Economic infrastructure definitely ensures the mobility of labour and capital
within/from the economy.
vi. It results in the overall growth of towns and cities.
vii. Infrastructures provide for a lot of employment generation and employment
opportunities.
viii. They also play a crucial role in national defence activities.
ix. Infrastructures in the economy directly result in the unity of various economic
components.
x. The economy and the nation will be able to meet any emergencies that arise.
xi. It creates a place and time utility.
xii. Infrastructural development plays a vital role in the development of agriculture
and industry.
xiii. Infrastructure like transportation, communication and telecommunication
breaks any economic isolation that prevails in the country.
xiv. They are a great and rich source of revenue to the Government.
xv. The development of economic infrastructure will directly result in the
development of economic trade.
 The development of a country wholly depends on the availability of its infrastructural
facilities. Infrastructure plays a vital role in the improvement of the country’s standard
of living. It also plays an important role in contributing to a higher rate of economic
growth.

MEANING OF ECONOMIC INFRASTRUCTURE

Economic infrastructure refers to the facilities, activities and services which support
operation and development of other sectors of the economy. These facilities, activities
and services help in increasing the overall productivity of the economy. They also play
an essential role in facilitating the smooth running of all the sectors of the economy.

In addition, infrastructures are such basic requirements like railways, roads, ships,
airways, communication, etc. They also include energy, banking, science, technology,
health, education and other public utility concerns. Without the existence and presence
of economic infrastructures, the growth and fast pace of the economy is impossible.
Moreover, infrastructures of an economy are also termed as ‘social and economic
overheads‘.

TYPES OF INFRASTRUCTURES
There are 2 broad classifications of economic infrastructures. They are as follows:

1. Social infrastructure. They concern with the supply of such services as to meet the
basic needs of a society. In simple words, social infrastructures refer those basic services such
as education and training. It also includes health and sanitation, drinking water, housing,
sewerage, etc. Social infrastructures are also termed as ‘social overheads’. These social
overheads indirectly support the economic systems. They indirectly increase the productivity
and the economy sees the impact after some time. Social infrastructures lead to growth in the
long run.
2. Physical infrastructure. Physical infrastructure is those infrastructures which
directly concern themselves with the needs of such production sectors as agriculture, industry,
trade, etc. In simple words, physical infrastructure directly supports the economic production.
They also directly support the process of production and distribution in the economy. A few
such examples are energy, irrigation, transportation, telecommunication, banking, insurance,
technology, finance, etc. Physical infrastructures, however, directly increase the productivity and
the economy sees the impact immediately. They also lead to an immediate growth in the short
run.
 SIGNIFICANCE OF ECONOMIC INFRASTRUCTURE
According to Dr V. K. R. V. Rao, “The link between infrastructure and development is
not a once for all affair. It is a continuous process and progress in development has to be
preceded, accompanied and followed by progress in infrastructure; if we are to fulfil our
declared objectives of a self-accelerating process of economic development”.

Discussed below are some of the most critical significance of economic infrastructure
and its impact on the economy.

 The smooth functioning of the economy. Infrastructural facilities are very

necessary and vital for the smooth functioning of the economy. They are like wheels of
development without which the economy will not be able to function properly.
 Development of agriculture. The development of agriculture, to a considerable
extent, depends on the adequate expansion and development of irrigation, credit, transport,
power, marketing, training and education. It also depends on the improvement of research and
development and other such facilities.
 Development of industry. Industrial production requires not only machinery and
equipment but also requires the following. Energy, skilled manpower, management, banking,
insurance and transportation services are crucial. These activities and facilities will directly lead
to the development of the industrial sector of the economy.
 Promotion of investment. Infrastructural development is definitely a pre-condition
got increasing economic investments. Those areas with the sound infrastructural base may
succeed in attracting all the more capital for investment.
 Improvement in productivity. Infrastructural development such as transportation
facilities and education increase the productivity. Development of science and technology is also
important in improving the economic productivity. Moreover, research and development also
play a critical role in economic improvement.
 Employee generation. Infrastructures play a crucial role in the generation of
employment opportunities. They improve mobility, efficiency and productivity of labour.
Moreover, larger investment, development of industry and agriculture create all the more
employment opportunities.
Some of the secondary but essential significance of the economic infrastructure
are as follows.

 Development of backward regions. The development of backward regions and the

removal of regional imbalances is yet another significant contribution of infrastructural
facilities. The lack of infrastructural facilities in the backward regions will act as a constraint on
the development of those regions.
 Social change. Infrastructural facilities will also act as an instrument of social changes.
Development of industries, transport facilities and education will change the outlook of people.
Apart from these, even science, technology and growth of towns and cities will lead to a changed
economic outlook.
 The growth of GDP. There exists a very close relationship between spending for
infrastructure and GDP growth. Studies reveal that 1% growth in the stock of infrastructure
often associates with 1% growth in per capita GDP.
 All round development/Overall development. Infrastructural development is
important not only for economic growth but also for the overall development. The all-round
development of the country and economy is crucial. Infrastructural facilities are also necessary
for technological innovation. Along with technological innovation, economic infrastructural
facilities are also important for the eradicating poverty and enhancing globalization.

Agencies

Infrastructure is a major sector that propels overall development of the Indian economy. The Secretariat for
Infrastructure in the Planning Commission is involved in initiating policies that would ensure time-bound creation of
world class infrastructure in the country. This section focuses on power, bridges, dams, roads and urban
infrastructure development. Details of the projects, organizations, policies, timelines, schemes, spending on
infrastructure are provided for the users.

 National Highway Authority of India (NHAI)

 National Highways and Infrastructure Development Corporation Limited (NHIDCL)
 Indian Roads Construction Corporation (IRCC)

The Ministry of Ports, Shipping and Waterways, a branch of the Government of India, is the apex
body for formulation and administration of the rules and regulations and laws relating to ports,
shipping and waterways,

Ministry of Housing and Urban Affairs formulates policies, supports programmes, monitors programmes and
coordinates the activities of various Central Ministries, State Governments and other nodal authorities. Information
on urban scenario, organizations and policies is available. Lists of attached offices, Statutory & Autonomous Bodies,
Public Sector Undertakings and Joint Ventures are also available. Details of various Urban programmes related to
Urban Transport, Urban Water Supply, Local self Government, etc. are provided for the users. Online Public
Grievance system is also...

MINISTRY OF JAL SHAKTI

DEPARTMENT OF WATER RESOURCES,
RIVER DEVELOPMENT & GANGA REJUVENATION
1.    Central Water Commission (CWC)
2.    Central Soil & Materials Research Station (CSMRS)
 Status of infrastrure
ROAD

The Indian road network, comprising of National Highways, Expressways, State Highways,
Major District Roads, Other District Roads and Village Roads, is globally the 2nd largest spanning
5.5 million kilometres.
India’s road infrastructure has seen consistent improvement in the last few years. Connectivity
has improved and road transportation has become a focus of rapid development. Roads are
providing better access to services, ease of transportation and freedom of movement to people.
Recognizing the significance of a reliable and swift road network in the country and the role it
plays in influencing its economic development, the Ministry of Road Transport and Highways
(MORTH) has taken up the responsibility of building quality roads and highways across the
country.
The year 2016-17, witnessed a considerable push being given to expand the Highway Network in
the country. A record 16,271 km of National Highways were awarded and 8,231 km were
constructed.1 More than 6,061 kilometres of highways were constructed in Financial Year (FY)
2015-16.2 The highest ever average daily construction rate of 133km was achieved for rural
roads.3 Budget 2017-18 also spelt optimism for the roads and highways sector with a total of
outlay of USD 14 billion. Out of this, USD 10 billion has been earmarked for National Highways
while the remaining is allocated towards the rural roads programme Pradhan Mantri Gram
SadakYojana (PMGSY).
Following are the major road infrastructure development initiatives in India:
 
1. NATIONAL HIGHWAYS DEVELOPMENT PROJECTS(NHDP)
 
The seven phased NHDP is being implemented by the National Highways Authority of India
(NHAI) with a total estimated expenditure of USD 92 billion.4 As the largest highway
development project in the country since 2000, more than 49,260 km of the roads are being
upgraded to match international standards.5
Key Projects under NHDP include the following under its various phases:6

 Development of National Highways to 4/6 lane standards on the following routes: 

1. Golden Quadrilateral connecting 4 major metropolitan cities viz. Delhi-Mumbai-
Chennai-Kolkata. North South & East West Corridors (NS-EW) connecting Srinagar to
Kanyakumari and Silchar to Porbandar with a spur from Salem to Cochin.
2. Road connectivity of major ports of the country to National Highways
 4-laning of 4,000 km of National Highways Upgradation of about 20,000 km of National
Highways to 2-lane paved shoulder
 Six laning of 6,500 km of existing 4 lane National Highways
 Development of 1,000 km of fully access controlled expressways under Public Private
Partnership (PPP) model following Design – Build – Finance – Operate (DBFO) approach. Nine
such expressways have been identified along High-Density Corridors. These corridors will seek
to ensure quicker connectivity.7
 Construction of standalone Ring Roads, Bypasses, Grade Separators, Flyovers, elevated
roads, tunnels, road over bridges, underpasses, service roads, etc. on BOT (Toll)
 Indian Railways (IR) is a governmental entity under the Ministry of Railways that operates
India's national railway system.[6] It is run by the government as a public good and manages
the fourth-largest railway network in the world by size, with a route length of 68,155 km
(42,350 mi) as of March 2019. 40,576 km (25,213 mi) or 64% of all the broad-gauge routes
are electrified with 25 kV 50 Hz AC electric traction as of August 2020. [4][5]
 In the fiscal year ending March 2019, IR carried 844 crore (8.44 billion) passengers and
transported 123 crore (1.23 billion) tonnes of freight.[4] IR runs 13,523 passenger trains daily,
on both long-distance and suburban routes, covering 7,321 stations across India.[4] Mail or
Express trains, the most common types, run at an average speed of 50.6 km/h (31.4 mph).
Suburban EMUs run at an average speed of 37.5 km/h (23.3 mph). Ordinary Passenger
Trains (incl. mixed) run at an average speed of 33.5 km/h (20.8 mph).[4] The maximum speed
of passenger trains varies, with the Vande Bharat Express running at a peak speed of
180 km/h (110 mph).
 In the freight segment, IR runs more than 9,146 trains daily. [4] The average speed of freight
trains is around 24 km/h (15 mph). The maximum speed of freight trains varies from 60 to
75 km/h (37 to 47 mph) depending on their axle load with 'container special' trains running at
a peak speed of 100 km/h (62 mph).
 As of March 2019, Indian Railways' rolling stock consisted of 289,185 freight wagons,
74,003 passenger coaches and 12,147 locomotives.[4] IR owns locomotive and coach-
production facilities at several locations in India. IR had 1.3 million employees as of March
2019, making it the world's eighth-largest employer.[4]
 The government has committed to electrifying India's entire rail network by 2023–24, and
become a "net-zero (carbon emissions) railway" by 2030. [7]
Indian Railways is headed by a seven-member Railway Board whose chairman reports to
the Ministry of Railways. Railway Board also acts as the Ministry of Railways. The officers manning
the office of Railway Board are mostly from organised Group A Railway Services and Railway Board
Secretariat Service. IR is divided into 18 zones, headed by general managers who report to the
Railway Board.[4] The zones are further subdivided into 68 operating divisions, headed by divisional
railway managers (DRM).[35][36][37] The divisional officers of the engineering, mechanical, electrical,
signal and telecommunication, stores, accounts, personnel, operating, commercial, security and
safety branches report to their respective DRMs and are tasked with the operation and maintenance
of assets. Station masters control individual stations and train movements through their stations'
territory. In addition, there are a number of production units, training establishments, public sector
enterprises and other offices working under the control of the Railway Board. [4]

Subsidiary companies[edit]
IR is a major shareholder in 16 public sector undertakings (PSU) and other organizations that are
related to rail transport in India. Notable among the list are: [4]
Financing, construction and project implementation[edit]

 Indian Railway Finance Corporation (IRFC)

 RITES Ltd
 Indian Railway Construction Corporation (IRCON)
 Mumbai Rail Vikas Corporation (MRVC) (51%)
 Rail Vikas Nigam Limited (RVNL)
Land and station development[edit]

 Rail Land Development Authority (RLDA)

 Indian Railway Stations Development Corporation (IRSDC)

The water supply and sanitation in India has increased greatly from 1980 to present. Still, many
people lack access to clean water, toilets, and sewage infrastructure. Various government programs
at national, state, and community level have brought rapid improvements in sanitation and the
drinking water supply. Some of these programs are ongoing.
In 1980 rural sanitation coverage was estimated at 1% and it reached 95% in 2018. [9][10] The share of
Indians with access to improved sources of water has increased significantly from 72% in 1990 to
88% in 2008.[9]
At the same time, local government institutions mandated to provide drinking water and sanitation
services are seen as weak and lack the financial resources to carry out their functions. In addition,
only two Indian cities have continuous water supply and according to an estimate from 2018 about
8% of Indians still lack access to improved sanitation facilities.[11]

programs related with Infrastructure development in rural and urban sector

: JNNURM - Jawaharlal Nehru National Urban Renewal Mission, PMGSY – Pradhan Mantri Gram Sadak
Yojana, RGGVY - Rajiv Gandhi Grameen Vidyutikaran Yojana, Ports Connectivity Projects, Indira Gandhi
International Air Port project

JNNURM

JNNURM was a huge mission which relates primarily to development in the context of urban
conglomerates focusing to the Indian cities. JnNURM aims at creating ‘economically productive,
efficient, equitable and responsive Cities’ by a strategy of upgrading the social and economic
infrastructure in cities, provision of Basic Services to Urban Poor (BSUP) [2] and wide-ranging urban
sector reforms to strengthen municipal governance in accordance with the 74th Constitutional
Amendment Act, 1992.

Sub-missions[edit]
JnNURM primarily incorporates two sub-missions into its program:
 The Sub-Mission for Urban Infrastructure and Governance administered by the Ministry of
Urban Development, with a focus on water supply and sanitation, solid waste management, road
network, urban transport and redevelopment of old city areas. [citation needed]
 The Sub-Mission for Basic Services to the Urban Poor (BSUP)[2] administered by the Ministry
of Housing and Urban Poverty Alleviation with a focus on integrated development of slums.[3]

 The Sub-Mission for Urban Infrastructure Development Scheme for Small & Medium Towns
(UIDSSMT) administered by the Ministry of Urban Development, with a focus on subsuming the
schemes of Integrated Development of Small and Medium Towns (IDSMT) and Accelerated
Urban Water Supply Programme (AUWSP) which aim at planned urban infrastructural
improvement in towns and cities under its purview.[5]
 The Sub-Mission for Integrated Housing and Slum Development Programme (IHSDP)
administered by Ministry of Housing and Urban Poverty Alleviation (MHUPA) was envisaged and
brought into effect in 1993–94 in accordance with providing the entire population with safe and
adequate water supply facilities. The program is mainly implemented in towns with populations
less than 20,000 as per the 1991 census.[6]

Objectives[edit]

 Focused attention relating to infrastructural services in the context of integrated development

is to be covered under the mission.
 Make efficient and increase self-sustaining capabilities of cities as per the sector proving
infrastructural services by securing the linkages between asset creation and asset
management[citation needed]
 Ensure adequate investment of funds to fulfill deficiencies in the urban infrastructural
services.
 Planned development of identified cities including peri-urban areas, out growths, urban
corridors, so that urbanization takes place in a dispersed manner.
 Scale up delivery of civic amenities and provision of utilities with emphasis on universal
access to urban poor.
 To take up urban renewal programme, i.e., re-development of inner (old) cities area to
reduce congestion.[7]
 Provision of basic services to the urban poor including security of tenure at affordable prices,
improved housing, water supply and sanitation, and ensuring delivery of other existing universal
services of the government for education, health and social security.

PMGSY
The PMGSY is under the authority of the Ministry of Rural Development and was begun on 15 th
aug,2000.[6] It is fully funded by the central government. During November 2015, following the
recommendations of the 14th Finance Commission, the Sub-Group of Chief Ministers on
Rationalization of Centrally Sponsored Schemes, it was announced that the project will be funded by
both the central government (60%) and states (40%). [7]

Aim[edit]
The aim was to provide roads to all villages

1. with a population of 1000 persons and above by 2003

2. with a population of 500 persons and above by 2007
3. in hill states, tribal and desert area villages with a population of 500 persons and above by
2003
4. in hill states, tribal and desert area villages with a population of 250 persons and above by
2007.[8]

Progress[edit]
Of 178,000 (1.7 lakh) habitations with a population of above 500 in the plains and above 250 in the
hilly areas planned to be connected by all-weather roads, 55% (97,838) were connected by March
2014, 82% (80% or 131,000 or 1.3 lakh under the PMGSY and 2% or 14,620 under state govt
schemes) were connected by December 2017. Of the remaining 47,000, work on all is in progress
except for 1700 which will be approved by the end of December 2017 and 100% connectivity will be
achieved by March 2019 (16 December 2017 update). [2] Pending work included harsh terrain states
of Assam, Jammu and Kashmir and Uttarakhand as well as left-wing Naxalite–Maoist
extremism infested state of Chhattisgarh, some districts of Jharkhand and Malkangiri district of
Odisha.[2]
The average speed of road construction under the PMGSY was 98.5 kilometers per day from 2004
to 2014, it rose to 130 km per day in by2014-17.[2]