Indian Economy - Infrastructure

Infrastructure

15.1 Infrastructure

Infrastructure means the facilities, activities and services which give support to the operation and development of various sectors of the economy. Infrastructure is treated as part of the capital stock of the economy, essential for providing different types of services. Capital stock like roads, buses, railway provide transport facilities, hospitals provide health services, canals, provide irrigation facilities. Proper infrastructure facilities are indispensable for economic development of a country. Poor infrastructure hampers the progress of industrialization. Country has to develop conducive infrastructure for industrialization.

Types of Infrastructure

Infrastructure can be divided into two segments namely.

-        Economic infrastructure

-        Social infrastructure

a.    Economic Infrastructure: All schemes of economic changes (power, transport communication), which serve as a foundation for the process of economic growth, are called economic infrastructure of a country.

b.    Social Infrastructure: It refers to the core element of social change (like Schools, Colleges, Hospitals, and Nursing homes) serving as a foundation for the process of social development of a country.

While economic infrastructure fosters economic growth (upliftment of living standards of the people), social infrastructure fosters human growth (upliftment of quality of life). Both the infrastructures are complementary to each other. Government need to make investment in development of both of these infrastructures.

15.2 Indian Railways

Indian Railways play a significant role in economic development of our country. The first railway train in India steamed off in 1853 from Bombay to Thane.

 Indian Railways has monopoly in Rail Transport System. Indian Railways is used for both carrying passengers as well as for transportation of goods. Nearly 11000 passenger trains run everyday in India.

Rail Transport for carrying goods is more economical and safer to other from of transportation. In recent years there has been major improvements in Rail Transportation system. It has helped to increase the speed of transportation. Government is also trying to increase the Railway network to more areas, extending the benefits of the Rail Transport system.

Advantages of railways transportation

(i)    Suitable for long distance land transport

(ii)   Safe means of transport for bulky goods.

(iii)  Helpful in agricultural produces transportation

(iv)  Economical & helpful in the development of trade & commerce

(v)   Indian Railway system earns through goods transport.

Problems of Indian Railway

In spite of many improvements in recent years, Indian railways have may problems:

i.      Existing Technology (in both Electric and Diesel Locomotive) is very old.

ii.    Railway Network is smaller and inadequate compared to the requirements of the economy.

iii.   A number of unremunerative lines are operated, due to social responsibilities.

iv.   Essential Goods like Food Grains, Fruits and Vegetables are sometimes carried at a loss.

v.    Over-crowding, Poor Passenger Services, Poor Hygiene in Railway stations, Delays, etc. are inherent problems in Railways.

15.3 Road Transport

Road Transport plays a significant role in economic development of a country. Road Transport is part of infrastructure facilities. Main advantage of Road Transportation is its easy accessibility. Railway transport, water transport facilities are not available everywhere. But Road Transport facilities can be extended to everywhere. Huge investment is needed for proper maintenance of existing road transport facilities.

Indian roads are classified into National Highways, State highways & Rural road. The National Highways encompass a road length of 58,110 kms constituting only 1.7% of the total length but they carry nearly 40% of the goods & passenger traffic.

National Highway Development Project (NHDP) project comprises

i.      5,846 km Golden Quadrilateral (GQ) GQ connects Delhi, Mumbai, Chennai & Kolkata

ii.    7300 km North-South, East-West Corridors

NS-EW corridors link Kashmir to Kanyakumari & Silchar to Porbandar.

Problems of Road Transport

Indian road transport system suffers from certain problems like:

i.      Road Length in insufficient considering the size of the country. More adequately maintained roads are required for free flow of transportation system.

ii.    Interior Area and Hilly Tracts are still not connected or linked with roads, government needs to give special attention to this problem.

iii.   Large tracts of Rural Roads are Mud Roads, which cannot be used for plying heavy traffic. At time of rainy seasons, traffic gets stalled for these muddy road.

iv.   Urban roads are poorly maintained. Due to constraints of financial resources, organizational inadequacies, procedural delays, shortage of essential materials, etc. many roads are so badly broken that vehicles can not move with proper speed.

v.     Most of the State Road Transport corporations are running on heavy losses, due to rising of operation, inefficiency in operations, etc.

15.4 Shipping

Shipping plays an important role in the transport sector of India’s economy. Approximately 95% of the country’s trade volume (68% in terms of value) is moved by sea. India has the largest merchant shipping fleet among the developing countries and ranks 19th in the world in terms of shipping tonnage. Indian shipping sector helps transportation of national and international cargoes. It also gives a variety of other services such as cargo handling, ship building/repairing, freight forwarding and training of maritime personnel.

Developed water transport is needed as export import business is dependent on well developed shipping facilities. Proper maintenance of port, vessels is needed to make the shipping transportation system conducive for development of international business. At present a significant portion of national income comes from international business. Due to poor maintenance, in some of our ports, commercial vessels cannot enter for low water level.    

15.4.1 Problems in Shipping transport

(i)    Inadequacy in tonnage capacity (currently, Indian ships carry only 29% of India’s total seaborne trade)

(ii)   Operation Constraints such as frequent breakdown of cargo handing equipment

(iii)  Indian Shipping Suffers from inadequate infrastructure support (like ship repair facilities dry docking & cargo handling, inadequate dredging etc.)

(iv)  High operating costs reduces the competitive strength of Indian shipping.

(v)   Lake of co-ordination in the entire chain.

15.4.2 Inland Water Transport

India has got about 14, 500 km of navigable waterways which comprise of rivers, canals, back waters, creeks, etc. Inland Water Transport (IWT), a fuel efficient and environment – friendly transportation mode. Its operations are currently restricted to a few stretches in the Ganga – Bhagirathi – Hooghly Rivers, the Brahmaputra, the Barak River, the rivers in Goa, the backwaters in Kerala, Inland waters in Mumbai and the deltaic religion of the Godavari Krishna rivers. Besides the organized operations by mechanized vessels, country boats of various capacities also operate in various rivers and canals. Our inland water transport system suffers from poor maintenance, inadequacy compared to requirements of the economy.

In India there are two kinds of water transport – Inland water transport or river transport & coastal marine transport. IWT comprises a variety of rivers, canals, backwaters, creeks etc. It is the cheapest mode for certain kinds of traffic, both over long & short levels. Out of total freight traffic of about 550 million tones IWT carries just 17 million tones, a small part of total transport network.

Indian Shipping (overseas) is an important mode of transport India and is the 2^nd largest shipping-owing country in Asia & 17^th in the world shipping in terms of tonnages. In 2002, shipping tonnage was 6.91 million GRT as against 1.92 GRT at the time of independence. After independence, major ports were built at Kandla in Gujrat, Haldia near kolkata, Nhava Sheva in Mumbai, Paradip in Orissa, Tulicam Mangaldi in Karnataka, Marmugas in Goa.

 15.5 Telecommunication Services

i.      India’s Telephonic Network is one of the largest in the world. At the time of independence India had 321 telephone exchanges.

ii.    Growth of Telecommunications Services (Telephone and Telex) has been significant with the advent of Internet, advanced cell phone technology, communications revolution, private sector participation, etc.

iii.   A number of value-added services like Radio Paging Services, Cellular Mobile Telephone Service, Electronic Mail, Public Mobile Radio Trunked Service, Voice Mail, Video Conferencing, etc. are available. Cost per Telephone Call has reduced very considerably in the recent past.

iv.   There are two major PSUs in the Telecom Sector – Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited(MTNL). But Private Enterprises have been playing a major role in this sector.

v.     Internet Connections and Broadband Subscribers have increased considerably.

vi.   Regularly Framework and Functions are carried out by Telecom Regulatory of India (TRAI).

The National Internet Exchange of India (NIXI) has been set up to ensure that internet traffic originated and destined for India, is routed properly within India.

Massive investments are being made for development of Telecommunication service. New technologies are being adopted in telecommunication sectors. Invention of internet is the greatest invention for development of telecommunication, public and private both sector participate in development of telecommunication service.

15.6 Postal Services

i.          India’s Postal System dates back to 1837. Indian Postal Network is the largest in the world, and connects every rural and urban locality

ii.        Many services like Speed Post, Business Post, Express Parcel Post, Media Post, Logistics Posts, Retail Post Services, Speed Post Passport services, etc. are available.

iii.       VSAT’s (very small Aperture Terminals) have been established to improve the speed and volume of Money Order transmission.

iv.       Many Post Offices are computerized and give better services. User-friendly services like pick-up of mails from the residence of the customers are also available.

v.         Automatic Mail Processing Centers (AMPC) are set up in many places, for faster processing of mails.

vi.       Post Offices also provide financial products such as Saving Bank, Saving Certificates, Postal Life Insurance, non-life insurance products, Mutual Funds etc.

Indian postal department is playing a crucial role in development of business in India.

vii.      E-bill Post services, under which customers are able to pay multiple utility bills at Post Office Counters are available. They are now being upgraded for multiple messaging, to make them useful for corporate.

viii.     Direct Post, which comprises of un-addressed postal articles like promotional items, has been introduced to provide the facility of direct advertising, and increasing the commercial activity in the country.

15.6.1 Premium Postal Services Products of India

i.          Speed Post: It was introduced on 1 august, 1986. It offers guaranteed delivery within a specified period.

ii.        Business Post: (1997) to meet the specific needs of big mailers.

iii.       Greeting Post: (2000) It seeks to synergise the core competence in extending postal and philatelic products to the public.

iv.       Speed Net: (2002) This is internet based track and trace service providing tracking facility to the customer.

v.         Speed Post Passport Service: It is venture of the Department of posts and the Ministry of External Affairs for providing greater access to passport application forms through out the country through designated speed post offices.

vi.       International Mails: India has been a member of the Universal postal Union since 1876 and of the Asian Pacific Postal Union since 1864. International EMS started in 1986 with five countries has now been extended to 97 countries.

vii.      Postal Life Insurance: (PLI) was introduced in 1884 as a welfare measure for postal employees Suraksha, Suvidha Santosh, Sumangal, Yugal Suraksha are the products  for postal Life Insurance.

viii.     Voice Mail: Voice mail Service provides the facilities of collecting and re-obtaining voice messages through telephone. This service is useful for the persons who are often on tours and do not have telephone facility. The customer of this service has one voice mail number and a mail box. Any message can be left with the mail box which can again be collected from it, if required. This service also reduces the financial burden of exchange bill.

15.7 Educational Development

Education plays an important role in the overall development of a human being and a society. The Indian Constitution specifies that education should be free for children below 14 years of age.

Aspects of Elementary Education of National Policy on Education (NPE)

-        Universal access and enrolment,

-       Universal retention of children upto 14 years of age, and

-       Substantial Improvement in the quality of education.

Education Programmes of India

-         National literacy mission: It  was launched in the year 1998. [Q:46] As a result, Gross Enrolment Ratio (GER) of children of 6-14 yrs has increased from 32.1 in 1950-51 to 84.91 in 2003-04 and further increased to 94.23 in 2004-05. Drop-out-rate at the primary has declined from 39% in 2001-02 to 31.4% in 2003-04.

-         Sarva Shiksha Abhiyan (SSA) : It has helped in providing elementary education to all children.

-         National programme for Education of Girls at Elementary Level (NPEGEL) : It is an important component of SSA.

-         Navodaya Vidyalayas : A  scheme for Navodaya Vidyalays was launched in 1987-88 to impart modern quality education to talented children.

-         Kendriya Vidyalyas : The number of Kendriya Vidyalya in the country is 877 having 7.50 lakh students on roll. There has been an impressive growth in the area of higher education with an increase in annul student enrolment from 7.26 million in 1997-98 to 9.95 million in 2003-04.  

Other Education Schemes  undertaken by Government

i.          Education Guarantee Scheme and Alternative and Innovation Education (EGS + AIE) [as a component of SSA]

ii.        Kasturba Gandhi Balika Vidhylaya (KGVB)

iii.       Mid-day Meal Scheme,

iv.       Prarambhik Shiksha Kosh (PSK)

v.         Affiliation and Recognition schemes in respect of Secondary Education (which prepares students of 14-18 years age group, for entry into higher education and employment).

vi.       Affiliation and Recognition schemes in respect of University and Higher education.

vii.      National Literacy Mission (NLM) and

viii.     Total Literacy Campaign (TLC)

New Development in Education Sector

Number of technical institutions has increased substantially. At present there are more 1200 recognised technical institutions at the 1^st degree level, 167 medical colleges, 797 institutions impart MCA courses & there are 820 approved management institutes imparting MBA courses. There are six IMS which are centres of excellence in management education. Further, for adult education, the National Literacy Mission was launched in 1998 as a Technology mission. It aimed at imparting functional literacy to non-literates in the country in the age group of 15-35 in a time bound manner.

15.8 Energy Sector

Role of energy in economic development

a)    Energy is a most vital input for most of the production processes and consumption activities.

b)    Economic Growth and Demand for Energy are correlated. Energy plays a crucial role in the economic development. Industrialization is solely dependent on adequate supply of energy.

c)    The most important traditional source of energy in rural India is fire-wood and cow dung cake. [Q:16]

d)    Coal is the primary source of energy in India.

e)    Solar energy is the most promising non-conventional source of energy in India.

f)     Generally, a 3% rise in industrial production is accompanied by a 2% increase in energy consumption.

Participants in Energy Sector in India

In India, both public sector and private sectors are allowed to participate in energy productions following are the major participants in energy sector in India:

The Government and private Sector work together in the area of power corporation,

-         The Central Government operates through National Thermal Power Corporation (NTPC), National Hydroelectric Power Corportaion (NHPC) and Nuclear Power Corportaion of India Limited (NPCIL) and Central Electric Regulatory Commission also exist.

-         State Governments have their respective State Electricity Boards (SEBs).

-         Many Private Sector Companies are also engaged in Power Generation.

-         Thermal power contributes 72% of the total power generation.

-         Hydel power contributes 15% of the power generation.

 Problems & difficulties in energy sector

i.      Demand & Supply imbalances in commercial fuels: Though demand for commercial fuels has increased at a modest rate of 5.5% per annum, domestic sources cannot support the demand.

ii.    Less capacity utilization: Production Capacity is denoted by Plant Load factor. PLF = Electricity generated / Production capacity. In India it varies from 55 to 65% i.e. good amount goes waste.

iii.   Losses of Electricity Boards: Electricity is distributed by State Electricity Boards. At present almost all Electricity Boards are running at huge losses mostly due to almost free supply of power to agriculture.

iv.   Transmission & distribution loss: The T & D Losses are very high in many of the SEB Systems. National average of this loss is around 23% while in many states it is more.

v.     Imbalance in the use pattern of commercial energy: There is an imbalance in the pattern of commercial energy between urban & rural areas. At present urban areas use around 80% of commercial energy though their share in population is about 26%. Though over 80% of villages are electrified a very small proportion of rural households (around 10%) use electricity.

Steps for removal of energy related problems

i.          Legislation and Amendments: Amendments in Electricity Act have been made giving focus on improved investment in Power Sector, fixing of Power Tariffs on the basis of competition, efficiency, economical use of resources, commercials principles and consumer’s interests.

ii.        Encouragement of Private Sector Participation: Private Sector Investment in Power is permitted in accordance with regulatory guidelines. Private sector participation will help to increase more energy production.

iii.       PLF Improvement: The ‘Partnership in Excellence’ Programme has been launched in order to improve generation of power, identify Thermal Stations with lower PLF and improve their efficiency.

iv.       Capacity: Increase electricity-generating capacity of the Existing Plants by development of Ultra-Mega Power Plants with higher capacity.

v.         National Grid: All India Power Grid to increase as National Grid, is envisaged to be developed known total inter-regional transmission capacity.

vi.       Use of Alternative Resources: Encouraging the use of Hydel and Wind Energy Sources which do not rely on fossil fuels and avoid carbon emissions. Use of alternative reasources for energy production will fulfil energy requirements to some extent.

vii.      T&D Reforms: Reforms in T&D is under taken to reduce transmission losses, improve the quality of power, reduce load shedding, and reduce average response for attending breakdowns.

viii.     Restructuring of SEBs: Steps taken to improve operations of SEBs, by way of rationalization of Tariff Structure, and monitoring of cost structure.

ix.       Rural Electrification: Steps are being taken to provide access to electricity to all area including villages and hamlets.

15.9 Air Transport

In 1953, air transport was nationalized. As per Air Corporation Act, 1953, two corporations Air India International & Indian Airlines were established. International Airports Authority of India was set up in 1972 for development of airports at Mumbai, Delhi, Kolkata, Chennai, Trivandrum.

Domestic Air Services are also provided by private airlines like Sahara, Jet airways Kingfisher, Spice Jet etc. Private operators account for 69% traffic. Number of passengers increased by 6 times from over 107 Lakh in 1980-81 to 593 Lakhs in 2004-05. For cargo, increased from about 179 thousand tones to 797 thousand tones in 80-81 to 1280 thousand tones in 2004-05. Traffic for domestic & international grew by 24% & 15% and cargo recorded a growth of 6.6% & 11.9%, 2nd highest in the world next to China.