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 often described as a Social Overhead Capital (SOC) in economics to distinguish it from Direct Production Capital (DPC).

ALBERT O. HIRSHMAN: SOC is usually defined as comprising those basic services without tertiary function. which primary, secondary and productive activities cannot

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 a 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
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 MTs B Kwh 32 5 413 587 462 663

1950-51

2004-05

2006-07

Units
Transport& Communication

1950-51 2004-05 2006-07

Railway goods traffic Cargo handled at ports Telecommunications Total telephones provided

MTs MTs

73 19

602 384

728 464

Millions

-NA-

23

272*

Source: Economic Survey 2007-08, ch9, * as on December 2007

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

199697 394.5

200102 515.0

200708 704.0

200809 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., and the increasing dependence on electric 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 X Plan XI Plan

Targeted 40,245 MW 41,110MW 78,577MW

Achieved 19,015MW 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, distribution areas and the ultimately customers

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.