Escolar Documentos
Profissional Documentos
Cultura Documentos
ABSTRACT
Infrastructure is the prerequisite for the development of any economy. Transport, telecommunications, energy,
water, health, housing, and educational facilities have become part and parcel of human existence. It is difficult
to imagine a modern world without these facilities. These are vital to the household life as well as to the
economic activity. Infrastructure plays a crucial role in promoting economic growth and thereby contributes to
the reduction of economic disparity, poverty and deprivations in a country. Greater access of the poor to
education and health services, water and sanitation, road network and electricity is needed to bring equitable
development and social emposwerment. It is an important pre-condition for sustainable economic and social
development. Infrastructural investments in transport (roads, railways, ports and civil aviation), power,
irrigation, watersheds, hydroelectric works, scientific research and training, markets and warehousing,
communications and informatics, education, health and family welfare play a strategic but indirect role in the
development process, but makes a significant contribution towards growth by increasing the factor productivity
of land, labour and capital in the production process, especially safe drinking water and sanitation, basic
educational facilities strongly influence to the quality of life of the people. This study establishes the relationship
between infrastructure and economic growth using growth theories by empirical evidences. Finally it concludes
infrastructure and poverty reduction in the Indian context.
Keywords: Infrastructure, Growth and Development, Infrastructural Investments, Poverty Reduction
INTRODUCTION
Infrastructure investment is an important driving
force to achieve rapid and sustained economic
growth. The presence of sufficient infrastructure
will require for the modernization and
commercialization of agriculture and the
achievement of income surpluses for capital
accumulation. It can provide a basis for the
expansion of local manufacturing industries, as
well as enlarging markets for the outputs of these
industries. Many studies have found a positive
relationship between the level of economic
development (measured by per capita income and
other indicators), and quality of housing and access
to basic amentias like electricity, safe drinking
water, toilets (Human Development Report of
India 2011). There is a precise link between
infrastructure and development. Infrastructure
investment directly affects the economic
development. Therefore, that the only way to build
up a countrys productive potential and raise per
capita income is to expand the capacity for
producing goods, this need not refer simply to the
provision of plant and machinery, but also to roads,
railways, power lines, water pipes, schools,
hospitals, houses and even incentive consumer
goods such as consumer durables, all of which can
contribute to increased productivity and higher
living standards.
The prosperity of a country depends directly upon
the development of Agriculture and Industry.
www.borjournals.com
81
CONCEPT OF INFRASTRUCTURE
Infrastructure, in general, defines as a set of
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. The term originated
during the World War II as a military term to mean
underlying structures in the early days of
Marshall Plan, as preferable to Social Overhead
Capital, to avoid confusion with hospitals, schools
and similar welfare type facilities. Since then, the
term has been widely used by economists but does
not have a precise definition till now. Different
www.borjournals.com
METHODOLOGY
The present study based on the secondary data,
collected from the different sources like World
Development Reports of various years, Human
Development Report of India (2011), majority of
data and literature collected from the existing
growth theories, empirical studies. Particularly this
study is not related to any region, state but its
concern Indias socio economic perspective. Why
infrastructure is more important other than the
growth determinants and how infrastructure
influences the different sectors of the economy,
than it studied the global and Indian experience of
infrastructure and growth through empirical
evidences and establish the relationship between
infrastructure and growth.
THEORITICAL FRAMEWORK
The provision and development of Infrastructure
has been subject of much theoretical analysis and
empirical studies. It is referred as an umbrella term
for many activities and named as Social
82
www.borjournals.com
83
www.borjournals.com
84
30
41
19
12
40
41
74
100
50
54
26
0
10
5
0
0
102
53
42
Infrastructure Measure
Public capital
Public capital
Transport, power &
communication
Transport, Water &
communication
Taiwan
0.24
Korea
0.19
DCs
0.16
USA
Transport &
Communication
Public capital
LDCs
Negative
www.borjournals.com
Transport &
Communication
85
Wylie (1996)
0.31
Public capital
Cross-Country
Canning (1999)
-0.23 to 0.22
USA
Duggall et al (1999)
0.27
Cross- Country
Calderon &Serven(2003)
0.16
Cross Country
OECD Countries
0.12
0.22
Transport &
Communication
Power and Telephones
Public capital
South Africa
Fedderke, Perkins,Luiz(2006)
-0.66 to 0.20
India
0.4 to 0.5
South Asia
0.26 to 0.3
China
Sahoo,Dash,Natraj(2010)
0.27 to 0.35
www.borjournals.com
86
www.borjournals.com
87
www.borjournals.com
the
report
calls
pillars,
to
measure
competitiveness.
The second basic pillar is
infrastructure. The report emphasizes that,
"Extensive and efficient infrastructure is critical for
ensuring the effective functioning of the economy,
as it is an important factor determining the location
of economic activity and the kinds of activities or
sectors that can develop in a particular economy.
Well-developed infrastructure reduces the effect of
distance between regions, integrating the national
market and connecting it at low cost to markets in
other countries and regions. In addition, the quality
and extensiveness of infrastructure networks
significantly impact economic growth and affect
income inequalities and poverty in a variety of
ways.
A
well-developed
transport
and
communications infrastructure network is a
prerequisite for the access of less-develop
communities to core economic activities and
services. Infrastructure development is one of the
major factors contributing to overall economic
development (I) direct investment in infrastructure
creates production facilities and stimulates
economic activities; (ii) reduces transaction costs
and trade costs, improving competitiveness and (iii)
provides employment opportunities and physical
and social infrastructure to the poor. In contrast,
lack of infrastructure creates bottlenecks for
sustainable growth and poverty reduction.
88
Punjab
Kerala
Tamil Nadu
Haryana
Gujarat
Maharashtra
West Bengal
Karnataka
Andhra Pradesh
Uttar Pradesh
Bihar
Orissa
Assam
Madhya Pradesh
Rajasthan
185.5
178.7
149.1
137.5
124.3
112.8
111.3
104.9
103.3
101.2
81.3
81.0
77.7
76.8
75.9
www.borjournals.com
89
REFERANCES
www.borjournals.com
90
www.borjournals.com
91