infrastructure development a key indicator of economic development

8/11/2019 INFRASTRUCTURE DEVELOPMENT A KEY INDICATOR OF ECONOMIC DEVELOPMENT

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Infrastructure plays a vital role in development of any

economy. The importance of infrastructure for sustained economic

development is well recognized.

Transport, telecommunications,

energy, water, health, housing, and educational facilities have

become part and parcel of human existence. Infrastructure plays a

crucial role in promoting economic growth and thereby contributes

to the reduction of economic disparity, poverty and deprivations in

a country.


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Infrastructure, in general, defines as a setof facilities through which goods and services are

provided to the public. Its installations do not

produce goods and services directly but provide

inputs for all other socio-economic activities.

Infrastructure is the stock of basic

facilities and capital equipment needed for the

functioning of a country or area; the term to refer

collectively to the roads, bridges, rail lines, and

similar public works that are required for an

industrial economy, or a portion of it, to function.


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One of the fastest growing world

economies

Reasonably proactive

Opening up of sectors for

investment

Promising consumer markets

Significant investment in

infrastructure creation for

industry

India today is fast changingsetting the pace for growth

and stability

TODAY

Slow rate of growth

Bureaucratic Protected and slow

Small consumermarkets

Underdevelopedinfrastructure

YESTERDAY


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Sectors Rs. crore US $ Billion Share

(%)

Electricity (incl. NCE) 1,820,292 350.1 32.7

Roads & Bridges 914,536 175.9 16.4Telecommunications 943,899 181.5 16.9

Railways (incl. MRTS) 643,379 123.7 11.5

Irrigation (incl. Watershed) 504,371 97.0 9.0

Water Supply & Sanitation 255,319 49.1 4.6

Ports (including inland waterways) 197,781 38.0 3.5

Airports 87,714 16.9 1.6

Storage 148,933 28.6 2.7

Oil & Gas Pipelines 58,441 11.2 1.0

Grand Total 5,574,663 1072.1 100.0


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FACTORS IMPEDING DEVELOPMENT OF INDIAS

INFRASTRUCTURE AND ECONOMIC GROWTH

Poor judicial system.

Acquir ing land in I ndia is not easy.

Poor Bureaucracy.

Corruption.

Black money.


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HOW INFRASTRUCTURE CONTRIBUTE

TO GROWTH


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I nf rastructure Development And Economic

Growth: L inkages

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 are to fulfill our

declared objectives of self accelerating process of

economic development.

- Dr. V. K.R.V. RAO

The linkage between infrastructure and economic

growth is multiple and complex, because not only does it

affect production and consumption directly, but it also creates

many direct and indirect externalities, and involves large

flows of expenditure thereby creating additional employment.


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Infrastructure& Economic Growth

Linkage

Infrastructureis key to:Production of goods & services

Trade & investment

Regional integration

Infrastructurepromotes:Sharing the benefits of growth

Income generation

Education & Health


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Budget and Infrastructure60% of Public Private Partnership (PPP) projects by

Indian Infrastructure Finance Company Limited (IIFCL);takeoutfinancing.

Investment in Infrastructure

2007 -2012 = $500 bn 2012 -2017 = $1.5 tn


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Infrastructural requirement scenario in

India

Urban population is expected to grow

about 50% by 2025

Growth in GDP is predicted to be 8-9% per

annum Road Traffic growth will be 15% per year

Air traffic is growing by 25% per year

Sanitation Coverage is only 35% currently


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ProcurementMaterials

Labor demand

Improved

social

indicators

New investment

FDI

Local

investment

Fiscal channel:

Increased

revenues for:

Pro-poor

programs

Infrastructure

Recurrent

costs etc.

Sustainability

Foreign residents/

travelers demand

Private channel

(Trickle down)

Investment

Consumption

Employmen

t creation

Growth

Higher

Income

Market creation/expansion

Increased

incentives

to entry

Opening up new

economic

opportunities

Improved

productivity ofexisting economic

activities

Improved

infrastructure

services

Availability

Cost reduction

Time saving

Reliability

Social DimensionImproved access to basicsocial/public serviceswith availability oftransport & power supply

Effective demand

of infrastructure

construction

(& operations)

Regional economy

activation

Rural

Urban

via: agriculture,

off-farm business,

tourism, services,

manufacturing etc.

INFRASTRUCTURE GROWTH AND

POVERTY REDUCTION

Economic Dimension


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I ndex of Social and Economic Inf rastructure


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CRITICAL STEPS IN MAKING INFRASTRUCTURE

FOR ECONOMIC GROWTH

Strong Government with clear direction.

Consistent and thoughtful marketing effort.

Bringing in the money (FDI & Private

participation).

Creation of zones and infrastructure for

businesses.

Business-above-al l atti tude.


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FOREIGN DIRECT INVESTMENT AND INFRASTRUCTURE

DEVELOPMENT

To facil i tate inf rastructure financing 100 per cent FDI is all owed

under the automatic route in some of the sectors such as mining, power,civil aviation sector, construction and development projects, industrial

parks, petroleum and natural gas sector, telecommunications and special

economic zones.


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CONCLUSIONCONCLUSIONCONCLUSIONCONCLUSIONCONCLUSION

Conclusion

Infrastructure services are essential to achieve

development targets in any economy some of its major

dimensions include the level of economic growth, level of

education, level of health services, degree of modernization,

status of women, level of nutrition, quality of housing,

distribution of goods and services, and access to

communication. But neither human well- being nor ofeconomic growth is possible only through the provision of

economic infrastructure as well as social infrastructure.

Health and education along with support

infrastructure such as shelter, sanitation, power, telephony,and road connectivity that can give economic growth a

human face. By improving the quality of human resources

and enhancing capability, these indicators act as stimulants

to growth.


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THANK YOU

infrastructure development a key indicator of economic development

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