Indian economy (BB301)Infrastructure

Course Instructor – Anshu Singh

Infrastructure

Infrastructure is the basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function.

Economic Infrastructure

Energy

Transport

Science and Tech

irrigation

communication

Health

Education

Social infrastru

cture

•While economic infrastructure fosters economic growth and physical development of the economy, social infrastructure facilitates human resource growth and development of good quality human resource. Both types of infrastructure are essential and complementary to each other.

•The demand for infrastructure in the 11th Five Year Plan (2007-2011) has been estimated to be US$ 492.5 billion(Planning Commission, 2007). To meet this growing demand, Government of India has planned to raise the investment in infrastructure from the present 4.7 percent of GDP to around 7.5 to 8 percent of GDP in the 11th Five Year Plan

Infrastructure and Economic Development• Infrastructure raises production and productivity• Induces investment• Generates linkages in production• Enhances size of the market• Enhances ability to work• Facilitates outsourcing• Promotes employment• Induces FDI• Facilitates international trade• Improves standard of living• Boosts agriculture• Promotes technological advancement

Infrastructure – Still a challenge• Low priority in plans• Huge requirement of investment• Exclusion of private sector• Regional imbalance• Poor maintenance• Less expenditure on research and development• Long gestation period• Inefficient utilization of funds and other resources

Components of Transport

• Roadways• Railways• Water transport• Air transport

Role of transport in development• Promotes agricultural development• Promotes industrial development• Facilitates large scale production• Development of rural and remote areas• Employment generation• National defence• Optimum utilization of resources• Backbone of trade• Helps during natural calamities like floods and famines.• Social transformation• Mobility of labour and capital• Increase in national income• Postal services• Encouragement to tourism• Availability of goods and services

• Political importance• Roads help in saving time and cost• They provide personal service with respect to timing, suitable vehicles etc.• Water and road are often cheap mode of transport.• Must for international trade and helps in earning foreign exchange

Energy

• Very important part of infrastructure• No industrial production is possible without energy• It is like a lifeline for the existence of human lives• Agriculture also needs energy to run tubewells, tractors and thrashers.• Energy is of two types commercial and non commercial• Non commercial includes firewood, agricultural waste and animal waste

and is generally used for domestic purposes like cooking• Coal, petroleum, natural gas, electricity and wind are more commercial

forms of energy. • They are used for commercial purposes in factories and farms and

command a price.• Energy can further be classified into conventional and non conventional

sources.

conventional

coal

petroleumelectricity

Natural gas

Conventional sources of energy are those that are known to us and are being used since a long time.Non conventional sources are renewable sources which are also environment friendly like solar energy, wind energy, biomass energy, geothermal energy and energy through tides and waves.

Power Generation – Emerging Challenges

• Inadequate generation of electricity has given rise to several other problems like excessive load on distribution, volta-0ge fluctuation, power cuts etc

• The shortage of electricity was about 10 % in 2008 – 09• Less capacity utilization• Losses of Electricity Boards• Huge investment requirement• Energy crisis leads to inflationary pressures• Balance of payment problems• Difficult to maintain sustainable growth• Encourage better participation from private and foreign players (FDI)

Communication

Communication is a means of transmission of information. It includes postal services, telecommunication, internet etc.TelecommunicationThe land line phones, cellular phones, internet services, fax services etc are important means of telecommunication. This sector has seen immense growth in India Number of Subscribers of Telecommunications(in Lakhs)

Year Cellular subscribers Fixed line subscribers

1996 -97 0.34 144

2000 -01 36 321

2007 -08 2,611 394

Dec 2009 4830 372

Irrigation

Although Indian agriculture is dependent on monsoon to a great extent, the importance and the role of irrigation cannot be discarded. Irrigation refers to man made sources of water like tubewells, tanks , canals etc.

Once Mahatma Gandhi said, “ In the absence of irrigation, agriculture is nothing more than a gamble.

Following points stress why irrigation is very important for Indian agriculture•Irregularities of rainfall•Unequal distribution of rainfall•Period of rainfall•Special crops•Intensive cultivation•More crop production

Significance of irrigation contd..• Waste land• Control over floods• Control over famines• Employment• Government income• Economic development• Useful for pastures• Development of inland water transport• Commercial farming

Irrigation under 11th planIn eleventh five year plan Rs 2,10,326 Cr is proposed to be spent on irrigation and flood control. Main irrigation targets are as follows

Item Major Medium

10th plan projects to be contd..

166 222

New projects of 11th plan 78 145

TOTAL 244 367

SCIENCE AND TECHNOLOGYToday science and technology has become a vital part of economic infrastructure . It ensures optimum utilization of resources and helps the economy in the following ways.

•Ne products are innovated•Quality of existing products are improved•Cost of production comes down•Helps in optimum utilization of resources•Saves time by providing faster means of working•Has revolutionized other sectors of infrastructure like health, education , irrigation, banking, transportation, communication etc.

Institutions for promoting researchFollowing are few departments and institutions set up by Govt for promoting science and technology

• Dept of Science and Technology• Dept of Atomic Energy• Dept of Biotechnology• Dept of Space• Indian Council of Agricultural Research• Indian council of Medical Research• Dept of Ocean Development• Indian Institute of Chemical Technology• National Geographical Research Institute• National Research Development Corporation

Health Health is an integral part of social infrastructure. It is essential for the citizen of the countryto be healthy and fit. In the eleventh plan also massive thrust has been placed on health related issues.

It can be gauged that there has been significant improvement in health services since independence•Decline in death rate•Reduction in infant mortality•Rise in avg expectancy of life•Control over deadly diseases•Reduction in child mortality rate.•The number of dispensaries and hospitals has increased from 9,209 to 33,855.•The number of doctors have increased from 61,840 to 7,25,00

Education

Although education is one of the priority issues of developing nations, the growth in this regardIn India has been very little.

Education sector requires government intervention and particularly for elementary education. Education in 11 th plan

•Improve the quality of education. Promote mid day meal scheme for increasing attendance in school•Emphasis on secondary and higher education•Sarva Siksha Abhiyaan will be promoted to universalize elementary education.•Encouraging private sector participation in higher education and skill development•Lower gender gap in literacy to 10 percentage points•Increase literacy rate for 7 yrs and above to 85 %•Reduce dropout rates of children