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INFRASTRUCTURE-ROLE IN INDIAN ECONOMY

Asst.Prof. V.R. Kishore Kumar, M.A., M.Phil SIBER, Kolhapur

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 fulfill our declared objectives of accelerating process of economic development ---V.K.R.V. Rao

INTRODUCTION
The

prosperity of a country depends directly upon the development of agriculture and industry. Both require different facilities. All the facilities and services which help in industrial and agricultural production constitutes collectively the infrastructure of the economy. The development and expansion of these are essential in a country.

INFRASTRUCTURAL FACILITIES
Irrigation Energy Transport Communication Banking, Science Social

finance and insurance

and Technology

Overheads

COMMON CHARACTERISTICS OF
INFRASTRUCTURE

Infrastructure Overhead (DPC).

often

described (SOC) in

as

Social to

Capital

economics

distinguish it from Direct Production Capital

ALBERT O. HIRSHMAN: SOC is usually defined as comprising those basic services without

which primary, secondary and tertiary productive


activities cannot function.

CHARACTERISTICS

Infrastructure is a source of external economies

Infrastructure fall in the category of public goods


Infrastructure development involves heavy costs

Infrastructural
investment innovation

development
creates

is

kind

of
for

which

conditions

Infrastructure stimulates directly productive activities

BASIC FEATURES
Heavy

investments by the government of infrastructure facilities

Provision

mainly for urban areas


Shown

not only urban bias but also shown

bias in favor of rich and more affluent

INDIAN INFRASTRUCTURE GROWTH


SINCE INDEPENDENCE
Indian

planners are fully aware of the link between infrastructural facilities and general economic development and accordingly they give high priority to the rapid expansion of these facilities right from the First Five Year Plan itself The plans have generally devoted 50% of the total outlay for infrastructure development phenomenal increase

Trends in Infrastructure Sector Performance


Unit 1950-51 2004-05 2006-07 2008-09

Energy
Coal Electricity generated Petroleum Crude Oil Finished Steel Cement MTs MTs MTs 0.4 1.0 2.7 34 39 132 34 50 154 33.5 57 181.4 MTs B Kwh 32 5 413 587 462 663 525 747

Units Transport& Communication Railway goods traffic

1950-51

2004-05

2006-07

2008-09

MTs MTs

73 19

602 384

728 464

833 531

Cargo handled at ports


Telecommunicati ons Total telephones provided

Millions

-NA-

23

272*

353.7

Source: Economic Survey 2009-10, ch9, * as on September 2008

PRODUCTION OF INFRASTRUCTURE
INDUSTRIES

The

infrastructure

industries

are

the

following:

electricity, coal, saleable steel, crude petroleum,

petroleum and cement. These infrastructure industries


have a weight of 26.7 in index number of industrial production in India (base 1993-94=100)

TRENDS IN INFRASTRUCTURE INDUSTRIES


Industry
Electricity generated Coal

197071 55.8

198081 110.8

199091 264.2

1996-97 2001-02 2007-08 2008-09

394.5

515.0

704.0

724.0

76.3
Finished steel Crude Petroleum Petroleum refinery products Cement

119.0

226.0

286.0

323.0

450.0

492.0

4.6

6.8

13.5

22.7

31.1

55.3

60.9

6.8

10.5

33.0

32.9

32.0

34.0

34.0

17.1

24.1

48.1

58.5

99.8

156.0

161.0

14.3

18.6

48.8

73.3

106.5

174.0

187.0

ELECTRICITY AND POWER GENERATION

According Draft Fifth Year Plan electricity is the most versatile form of energy and provides an important

infrastructure for economic development. It is a vital


input for industry and agriculture and is of particular importance to a developing rural sector which needs more power for its agricultural operations, for its small scale and agro industries. All sectors of the economy

need electricity for their common needs of water supply,


transport, communication and domestic lighting.

Given the large scale dependence on lift irrigation for food productivity, food processing and preservation industries, the increase in the power intensive industries such as aluminum, fertilizer, petro-chemicals etc., increasing dependence on electric and the traction for

transportation, there is hardly any community or sector

which is not effected by a power shortage today. The future


development of the country, therefore will depend upon the rate of growth of power generation capacity

EXPANSION OF GENERATION CAPACITY

Plan Period IX Plan

Targeted 40,245 MW

Achieved 19,015MW

X Plan
XI Plan

41,110MW
78,577MW

21,080MW

TRANSPORTATION

In modern world, transport along with energy is the basic infrastructural requirement for industrialisation and

accordingly, the developing countries have accorded it


an important place in their programmes of economic development.

Specialization and exchange are complementary Transport Infact provides a vital link between centers of

production,
customers

distribution

areas

and

the

ultimately

Important means of transport are railways, roadways,


waterways(inland and overseas) and airways.

Rail Transport: the development and expansion of railways has revolutionized the transport system the word over.

Operations begun in 1853- Bombay to Thane 34km Largest in Asia and Second in the World Total network 63,465km(all guage) Electrified network 28percent

Total traffic 2008-09


Passengers 6,791million and 832million tones of freight Communications: communication means the imparting or transmission of information.

Necessary for the development of various sectors of the economy

Most important are postal services, telephone services,

teleprinters, radio and television etc.