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.



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.
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 changing setting the pace for growth
and stability
TODAY
Slow rate of growth
Bureaucratic
Protected and slow
Small consumer
markets
Underdeveloped
infrastructure
YESTERDAY
Sectors Rs. crore US $ Billion Share
(%)
Electricity (incl. NCE) 1,820,292 350.1 32.7
Roads & Bridges 914,536 175.9 16.4
Telecommunications 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
FACTORS IMPEDING DEVELOPMENT OF INDIAS
INFRASTRUCTURE AND ECONOMIC GROWTH
Poor judicial system.
Acquiring land in I ndia is not easy.
Poor Bureaucracy.
Corruption.
Black money.


HOW INFRASTRUCTURE CONTRIBUTE
TO GROWTH
I nfrastructure Development And Economic
Growth: Linkages
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.
Infrastructure & Economic Growth
Linkage
Infrastructure is key to:
Production of goods & services
Trade & investment
Regional integration
Infrastructure promotes:
Sharing the benefits of growth
Income generation
Education & Health
Budget and Infrastructure
60% of Public Private Partnership (PPP) projects by
Indian Infrastructure Finance Company Limited (IIFCL);
takeout financing.
Investment in Infrastructure
2007 -2012 = $500 bn 2012 -2017 = $1.5 tn




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
Procurement
Materials
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 of
existing economic
activities
Improved
infrastructure
services
Availability
Cost reduction
Time saving
Reliability
Social Dimension
Improved access to basic
social/public services
with availability of
transport & 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

I ndex of Social and Economic I nfrastructure
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-all attitude.
FOREIGN DIRECT INVESTMENT AND INFRASTRUCTURE
DEVELOPMENT
To facilitate infrastructure financing 100 per cent FDI is allowed
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.
CONCLUSION CONCLUSION CONCLUSION CONCLUSION CONCLUSION
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 of
economic 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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