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INFRASTRUCTURE-ROLEIN
INDIANECONOMY
Asst.Prof. V.R. Kishore Kumar,
M.A., M.Phil
SIBER, Kolhapur
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The link between infrastructure anddevelopment 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
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INTRODUCTION
The prosperity of a country dependsdirectly upon the development ofagriculture and industry. Both require
different facilities.All the facilities and services which help
in industrial and agriculturalproduction constitutes collectively theinfrastructure of the economy. Thedevelopment and expansion of these areessential in a country.
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INFRASTRUCTURALFACILITIES
Irrigation
Energy
Transport
Communication
Banking, finance and insurance
Science and Technology
Social Overheads
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COMMONCHARACTERISTICSOF
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
which primary, secondary and tertiary productive
activities cannot function.
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CHARACTERISTICS
Infrastructure is a source of external economies
Infrastructure fall in the category of public goods
Infrastructure development involves heavy costs
Infrastructural development is a kind of
investment which creates conditions for
innovation
Infrastructure stimulates directly productive
activities
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BASICFEATURES
Heavy investments by the government
Provision of infrastructure facilities
mainly for urban areas
Shown not only urban bias but also shown
bias in favor of rich and more affluent
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INDIANINFRASTRUCTUREGROWTH
SINCEINDEPENDENCE
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 thetotal outlay for infrastructure development
phenomenal increase
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Trends in Infrastructure Sector
Performance
Unit 1950-51 2004-05 2006-07 2008-09
Energy
Coal MTs 32 413 462 525
Electricity
generatedB Kwh 5 587 663 747
Petroleum
Crude Oil MTs 0.4 34 34 33.5
Finished
SteelMTs 1.0 39 50 57
Cement MTs 2.7 132 154 181.4
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Units 1950-51 2004-05 2006-07 2008-09
Transport&
Communication
Railway goods
trafficMTs 73 602 728 833
Cargo handled atports
MTs 19 384 464 531
Telecommunicati
ons
Total telephonesprovided Millions -NA- 23 272* 353.7
Source: Economic Survey 2009-10, ch9, * as on September 2008
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PRODUCTIONOF 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)
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TRENDSININFRASTRUCTUREINDUSTRIES
Industry1970-
711980-
811990-
911996-97 2001-02 2007-08 2008-09
Electricitygenerated 55.8 110.8 264.2 394.5 515.0 704.0 724.0
Coal76.3 119.0 226.0 286.0 323.0 450.0 492.0
Finishedsteel 4.6 6.8 13.5 22.7 31.1 55.3 60.9
CrudePetroleum 6.8 10.5 33.0 32.9 32.0 34.0 34.0
Petroleumrefineryproducts
17.1 24.1 48.1 58.5 99.8 156.0 161.0
Cement14.3 18.6 48.8 73.3 106.5 174.0 187.0
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ELECTRICITYANDPOWERGENERATION
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.
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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
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EXPANSIONOFGENERATIONCAPACITY
Plan Period Targeted Achieved
IX Plan 40,245 MW 19,015MW
X Plan 41,110MW 21,080MW
XI Plan 78,577MW
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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 ofproduction, distribution areas and the ultimately
customers
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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
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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.