Role of Infrastructure Services on the Economic Development of India

The importance of infrastructure for sustained economic development is well recognized. High transaction costs arising from inadequate and inefficient infrastructure can prevent the economy from realising its full growth potential regardless of the progress on other fronts. Physical infrastructure covering transportation, power and communication through its backward and forward linkages facilitates growth, social infrastructure including water supply, sanitation, sewage disposal, education and health, which are in the nature of primary services and has a direct impact on the quality of life. The performance of infrastructure is largely a reflection of the performance of the economy.

The transportation infrastructure includes roads, vehicles, railways, tracks, trains, ports, airports, ships and vessels. Road transportation is perhaps the most important because the railway tracks cannot be laid everywhere.

India’s infrastructure and transport sector contributes about 5% of its GDP. India has the world’s second largest road network in quantitative terms, covering more than 4.3 million kilometers. Qualitatively, India’s roads are a mix of modern highways and narrow, unpaved roads. India also has the lowest kilometer lane road density per 100,000 people among G-27 countries – leading to traffic congestion. It is upgrading its infrastructure. As of May 2014, India had completed and placed in use over 22,600 kilometres of recently built 4 or 6-lane highways connecting most of its major manufacturing, commercial and cultural centers. India’s road infrastructure carries 60% of freight and 87% of passenger traffic.

Role of Infrastructure Services on the Economic Development of India

Indian Railways is the fourth largest rail network in the world, with a track length of 114,500 kilometers and 7,172 stations. This government owned and operated railway network carried an average of 23 million passengers a day, and over a billion tonnes of freight a year.

Airports and civil aviation are also part of the transportation network in the country. Air travel is fast and highly comfortable.  The airport infrastructure of India includes 125 airports, of which 66 airports are licensed to handle both passengers and logistics.

India has a coastline of 7,500 kilometers with 13 major ports and 60 operational non-major ports, which together handle 95% of the country’s external trade by volume and 70% by value (rest handled by air). Nhava Sheva, Mumbai is the largest public port, while Mundra is the largest private sea port.

These ports have a capacity of over 450 million tonnes. The number of cargo vessels handled at these ports is about 16,500 per annum. The cargo handled is liquid cargo, dry cargo and container cargo. The Eleventh Plan outlay for port sector is around Rs. 6,500 crore.

If one sector has developed more than any other sector during the last one decade or so, it is the communication sector. It encompasses the postal network, mail system, telecommunications, including telephones, mobile phone services, etc.About 74 people out of 100 have land or wireless telephones in India, or about 927 million telephone subscribers, two-thirds of them in urban areas. Internet use has been growing rapidly in India, with an estimated 243 million users in June 2014. This is projected to grow to 330–370 million users by 2016.

The postal service is catering to the mailing, telegraphic services which have now been supplemented by courier services. India has a huge infrastructure for postal and telecommunication services whereby letters, parcels and messages are sent to various parts of the country and abroad. Mobile phone services are the buzzword of our society now. Several companies like Bharti Airtel, Reliance Communication, Hutch and Vodafone are flourishing apart from the public sector MTNL.

Infrastructure is the base on which all economic activities of the country depend. The government is spending thousands of crores of rupees every year to create this infrastructure where it does not exist or is not fully functional. It has also established adequate systems for their maintenance and upkeep so that it remains efficient and durable.