INFRASTRUCTURE

PART 1
XII ECONOMICS
INDIAN ECONOMIC DEVELOPMENT
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Infrastructure is the term for the basic physical systems of a
nation or business.
Transportation, Communication, Sewage, Water, health,
Electric system, etc. are the examples of Infrastructre.
These systems tend to be high cost investments and are vital to
a country’s economic and social development.

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 Infrastructure can be categorized into two heads:
(i) Economic Infrastructure: It is defined as infrastructure that
promotes economic activity, such as roads, highways, railroads,
airports, sea ports, electricity, water supply etc. It helps in production
of goods and services and its distribution. In the absence of economic
infrastructure, it is virtually not possible to develop an efficiency
system of growth and development.

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(ii) Social infrastructure: Social infrastructure refers to the core
elements of social change (like school, universities, hospitals, and
nursing homes) which serve as a support system for the process of
social development of a country. Social development focuses on
human resource development. It implies that the development of
skill personnel as well as healthy and efficient human beings

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(Economic infrastructure are commercial in nature. It provide basic
facilities to make the business in the country easier and more
profitable. The same also makes the economy richer. While social
infra, like healthcare for poor, sanitation, education, skill
development, parks, etc. is more on providing basic well being
facilities for the needy. Here private sector is showing less interest
since it is not much profitable. It is more like social service so state
and central government provides social infrastructure

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Economic infrastructure enhance economic growth
(implying an increase in living standards of the people),
social infrastructure focus on human growth (implying an increase
in their quality of life). While economic infrastructure accelerates
the process of growth, social infrastructure accelerates the
process of human development. Hence both are supplementary
and complementary to each other.)

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 Importance of Infrastructure
(i) 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.

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(ii) Development of agriculture: The development of modern
agriculture depends on infrastructural facilities (roadways,
railways and shipping) for speedy and large-scale transport of
seeds, pesticides, fertilizers, etc. Development of agriculture
also depends on the development of irrigation, credit,
transport, power, marketing, training, improvement of research
and development and other such facilities

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(iii) Development of industry: Industrial production requires
not only machinery and Equipment's but also requires.
Energy, skilled manpower, management, banking, insurance
and transportation services. These activities and facilities will
directly lead to the development of the industrial sector of the
economy.

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(iv) 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. More ever,
research and development also play a critical role in economic
development.

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(v) Employment generation: Infrastructure helps in generating
employment. Many people get employment in infrastructural
project like construction and maintenance of road, railways,
electricity plants, etc. Many more people are able to find
employment in industry and trade, after the development of
strong infrastructure.

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(vi) Infrastructure enhances size of the market: Large scale
production is possible only when size of the market is large.
Infrastructure enhances size of the market. Proper transportation
facilities and other economic infrastructure leads of expansion of
market.

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(vii) Infrastructure facilitates outsourcing: A country with
advance infrastructure facilities is able to get benefits from the
outsourcing work. India is emerging as a global destination for
BPO, KPO’s, call Centers, etc. due to IT support system and sound
infrastructure.

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(viii) Infrastructure induces foreign direct investments (FDI):
Due to sound infrastructure flow of investments from abroad
increases

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 STATE OF INFRASTRUCTURE IN INDIA
Traditionally, building and maintaining infrastructure in India has been
one of the responsibilities of government. But with time, the government
has started permitting private sectors into the field of infrastructure.
Currently, many of the infrastructure projects in the country are handled
either soley by private sector enterprises or under a joint venture of the
public and private sector. Infrastructure in India has still a very long way
to go before we can call ourselves a developed nation. The rural sector in
India is still underdeveloped. The roads and other means of
transportation are still not very developed we require well roads
connecting the remote areas of the country with the urban states so that
more and more facilities are made available to the rural Indian
population.
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A lot of artists and farmers still work in the remote places of the
country and are unable to sell their products in various places due
to lack of proper infrastructure. Majority of our people live in rural
areas. Rural women are still using bio-fuels such as crop residues,
dung and fuel wood to meet their energy requirement They walk
long distances to find fuel, water and other basic needs. Safe
drinking water with Pucca house is still a dream for vast proportion
of population. Bullock carts still play a crucial role in rural
transportation market. Thus, development of infrastructure and
economic development go hand in hand.

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Agriculture depends, on the adequate expansion and development of
irrigation facilities. Industrial progress depends on the development
of power and electricity generation, transport and communications.
Obviously, if proper attention is not paid to the development of
infrastructure, it is likely to act as a severe constraint on economic
development.

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Thank You
SPCC

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