Infrastructure: Energy, Ports, Roads, Railways, Airports etc

How did India’s Infrastructure develop into what it is today? What are the major milestones in India’s Infrastructure development? Which sectors are included as key areas of Infrastructure of the country? Read here to get more ideas about India’s Infrastructure development.

According to the government, India’s economy is projected to grow to $5 trillion by 2024 and to $10 trillion by 2030.

Approximately 700 to 900 million square meters of new urban space will be built annually between 2022 and 2030. However, The improvement of the infrastructure continues to be a major obstacle to India’s economic growth.

The development of additional infrastructure facilities, such as those for transportation, energy, power, and communications, is necessary for economic growth. This demonstrates the need for India’s infrastructure to receive more attention.

Infrastructure development in India

The Industrial Policy Resolution (IPR) 1948 advocated for a mixed economy.

The “Bombay Plan,” put up earlier by eight powerful industrialists, called for a significant public sector with State interventions and restrictions to safeguard indigenous industries.

India established the Planning Commission in 1950 to oversee all aspects of planning, including resource allocation, five-year plan implementation, and plan evaluation. These plans were centralized plans for economic and social development based on Soviet-era models.

The first five-year plan (1951- 1956), The Harrod–Domar model served as the foundation for this strategy. It concentrated on irrigation and agriculture to increase farm output.

• A plan to establish five Indian Institutes of Technology (IITs) as important technical institutions was one of the most significant advancements in infrastructure.

Second Five-Year Plan, The plan prioritised “rapid industrialization” and the growth of the public sector.

• The Mahalanobis model was used in the Plan. Steel and power were named as the main planning pillars.
• Along with this strategy and the Industrial Policy Resolution of 1956, which has long been regarded as India’s economic constitution, there was a deliberate push for the replacement of the basic and capital goods sectors.
• The developments included the following:

1. With assistance from the Soviet Union, Britain (the UK), and West Germany, hydroelectric power projects and five steel mills were created in Bhilai, Durgapur, and Rourkela, respectively.
2. The amount of coal produced rose.
3. The North East received more railway lines.

During the Fourth Plan (1969– 1974), the nationalization of 14 public sector banks was a significant development that had a profound effect on the Indian economy and infrastructure.

The Fifth Plan (1974-78) saw the introduction of the Indian National Highway System and the widening of numerous highways to handle the rising traffic

After the Economic Reform in 1991, Infrastructure services in India are gradually transitioning from being under government control to being provided by the private sector.

• Up until 1991, the public sector dominated the private sector, which merely supported the economy.
• With the assistance of the public and private sectors, India has experienced tremendous growth in the industrial and infrastructure sectors in recent years.
• Following the 1991 policy, FDI (Foreign Direct Investors) entered the industries directly and indirectly. With their assistance, India received funding and equipment to build and grew to be one of the countries that spent the most on infrastructure and industries.
• State-owned agencies are giving way to private sector companies in sectors ranging from telecommunications and highways to power and ports, allowing them to function in a competitive market and subject to economic control where necessary.
• Similar to how protein is the lifeblood of the human body, infrastructure is an economy’s “lifeline.” An appropriate degree of infrastructure presence is a prerequisite for growth and development.

The Key areas of infrastructure development include energy, Ports, Road, Railways…etc

Energy sector

Energy is one of the most crucial ties for sustainable economic progress and human development.

• One of the key metrics used to evaluate a nation’s economic and social growth is its per capita energy consumption.
• Professionals agree that energy is one of the key factors boosting the economy in emerging nations like India and is a crucial component of economic development.
• The Indian energy sector has experienced significant expansion in response to the demands of a developing country.
• Many areas have transformed, including resource exploration and exploitation, capacity expansion, and energy sector reforms.
• However, resource expansion and an increase in energy supply have fallen short of the demands placed on them by the expanding population, fast urbanization, and advancing economy. As a result, India continues to experience severe energy shortages and is forced to rely on imports.

Port Infrastructure

Port infrastructure is essential to every country’s development.

• India has an around 7,500 km long coastline. Ports handle almost 90% of India’s external trade in terms of volume and 70% in terms of value.
• Iron ore, coal, crude petroleum, and other necessary commodities are all imported via the marine route.
• India’s coastline is home to 205 minor ports and 12 major ports.

Road Network

India has one of the world’s largest road networks. Every year, roads carry about 85% of all people and 70% of all freight.

• Road transit is preferable for short-distance. For construction and maintenance, roads are divided into National Highways (NH), State Highways (SH), Major District Roads, and Rural Roads.

Railways

Under single management, India’s railway system is the second largest in Asia and the fourth largest in the world.

• The 1,23,236 km route network of Indian Railways carries 23 million passengers daily and 3 million tonnes (MT) of freight from 7,349 stops on 13,452 passenger trains and 9,141 freight trains.
• The Indian Railway, which offers both freight and passenger modes of transportation, is the main thoroughfare of the nation and is also known as the “lifeline of India.”
• It aids in the development and economic integration of the nation.

Airports

The International Air Transport Association predicts that by 2030, India will surpass both China and the United States as the third-largest air passenger market in the world.

• India’s civil aviation sector has experienced one of the nation’s fastest rates of growth during the last three years.
• India has overcome the United Kingdom to claim third place in the global domestic aviation market, and by 2024, it is predicted that India will surpass the UK as the third-largest air passenger market worldwide.
• As of June 2020, there were 153 airports in the nation. Of the 153 airports, only 114 were used for domestic flights. These airports were either privately owned, a joint venture, or owned by the Airport Authority of India or the states in which they were situated.

To read more Economics Notes, click here

Article Written By: Aryadevi E S