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1. ROLE OF INFRASTRUCTURE FOR
ECONOMIC DEVELOPMENT
TARAPATI BHATTRAI
074/MSIM/18 DATE : 13TH AUGUST, 2017

2. WHAT IS INFRASTRUCTURE?
 The basic physical and organizational structures and facilities (e.g. buildings,
roads, power supplies) needed for the operation of a society or enterprise.
[Source : Oxford Dictionary]
 Infrastructure refers to the fundamental facilities and systems serving a
country, city, or area, including the services and facilities necessary for
its economy to function.
[Source : Wikipedia]
 Infrastructure defines as :
a) The basic structural foundation of an economy.
b) An underlying base or foundation especially for an organization or system.

3. INFRASTRUCTURE TYPES
Economic Infrastructure Social Infrastructure
 Energy( electricity, coal, oil and gas)
 Transport( railways, roads, ports)
 Telecommunication (including posts)
 Special economic zones
 Urban infrastructure(water supply,
sewerage, drainage, city roads)
 Rural infrastructure

4. INFRASTRUCTURE TYPES
Economic Infrastructure Social Infrastructure
 Health and family welfare.
 Education and training.
 Human development and social security.
 Poverty and poverty alleviation programs.
 Labor Employment and Welfare.
 Empowerment of women.
 Empowerment of socially disadvantaged groups.

5. ECONOMIC DEVELOPMENT
Note :
Economic growth may be one
aspect of economic development
but is not the same
Economic growth: A measure of the
value of output of goods and
services within a time period
Economic Development:
A measure of the welfare of
humans in a society
Economic development, Generally refers to the sustained, concerted actions of
policymakers and communities that promote the standard of living and economic health
of a specific area.

6. INDICATORS OF ECONOMIC DEVELOPMENT

7. INDICATORS OF ECONOMIC DEVELOPMENT

8. INDICATORS OF ECONOMIC DEVELOPMENT

9. INDICATORS OF ECONOMIC DEVELOPMENT

10. RELATION : INFRASTRUCTURE AND ECONOMIC
DEVELOPMENT
As Infrastructure Increases, It results to
increase in country’s income.
 Infrastructure is basically the
base in which economic
development is built upon.
 Infrastructure has a two-way
relationship with economic
development.
a) Infrastructure promotes
economic growth,
b) Economic development
brings about changes in
infrastructure.

11. RELATION : INFRASTRUCTURE AND ECONOMIC
DEVELOPMENT
The first, the forward linkage, between infrastructure and economic growth, derives from
the following factors:
a) Output of infrastructure sectors such as power, water, transport, etc. are used as inputs for
production in the directly productive sectors, viz. agriculture, manufacturing, etc. Therefore,
insufficient availability of the input results insufficient production.
b) Infrastructure development such as transport improves productivity significantly.
c) Infrastructure provides the key to modern technology in practically all sectors.
d) A close association between infrastructure and GDP growth is observed in many studies.
These studies have indicated that 1 per cent growth in the infrastructure stock is
associated with 1 per cent growth in per capita GDP.
e) Studies have also revealed that generally around 6.5 per cent of the total value added is
contributed by infrastructure services in low income countries. This proportion increases to 9
per cent in middle income countries and 11 per cent in high income countries.

12. RELATION : INFRASTRUCTURE AND ECONOMIC
DEVELOPMENT
Second, the backward linkage, between economic
growth and infrastructure, drives from the
following.
 Growth, in turn, makes demands on
infrastructure.
 As a result, with increase in income levels, the
composition of infrastructure changes.
a) In low income countries, basic infrastructure
such as water, irrigation is more important..
b) In middle income economies, demand for
transport grows fast.
c) In high income economies, power and
telecommunications occupy more importance.
Due to such linkages between- infrastructure and
the rest of the economy, efficiency,
competitiveness and growth of the economy
hinges upon the state of development in the
infrastructure sector.
GDP
growth
Increase traffic
demand
Required changes in
transport supply
If provided,
catalyzes GDP
growth, otherwise
constricts it
Affects traffic
demand

13. RELATION : INFRASTRUCTURE AND ECONOMIC
DEVELOPMENT
Infrastructure has expanded tremendously in
recent days.
ThecompositionofInfrastructure
changeswithcountryincomelevel.

14. ROLE OF INFRASTRUCTURE IN ECONOMIC
DEVELOPMENT
Infrastructure
Increases
Agricultural
Production
and
Productivity

15. ROLE OF INFRASTRUCTURE IN ECONOMIC
DEVELOPMENT
Infrastructure
Accelerates
Industrial
Growth

16. ROLE OF INFRASTRUCTURE IN ECONOMIC
DEVELOPMENT
Infrastructure
Increases the
Flow of
Foreign
capital

17. ROLE OF INFRASTRUCTURE IN ECONOMIC
DEVELOPMENT
Infrastructure
Generates
Employment
Opportunities

18. ROLE OF INFRASTRUCTURE IN ECONOMIC
DEVELOPMENT
Infrastructure
Contributes to
Tourism
Development

19. ROLE OF INFRASTRUCTURE IN ECONOMIC
DEVELOPMENT
Infrastructure
and National
Defense

20. ROLE OF INFRASTRUCTURE IN ECONOMIC
DEVELOPMENT
Contributes to
Domestic
Market
Development
Rural roads in the developing countries have a major
effect in improving marketing opportunities and reducing
transaction costs. (fig. Afghanistan)

21. ROLE OF INFRASTRUCTURE IN ECONOMIC
DEVELOPMENT
Contributes to
Development
of Backward
Region
Presence of Airport and
road way has increased
the development rate of
Jomsom

22. ROLE OF INFRASTRUCTURE IN ECONOMIC
DEVELOPMENT
Infrastructure
and Social
Development
Assists to
Reduce
Poverty
Improves the
Quality of
Growth
Instrument of
Social change