INFRASTRUCTURE DEVELOPMENT: SOME BASIC ISSUES

Notwithstanding many theoretical and empirical literatures showing correlation between investment in infrastructure development and economic growth, central government did not give much focus on policy framework in the initial plan periods for developing infrastructures excepting in railways, roads, telecommunication, ports, water supply, sanitation, sewerage and air ports. With this background, this paper aims to discuss the constraints and other issues which impeded progress in infrastructure development in India. Other objective of this paper is to make it useful to those who are associated with infrastructure project. Investment in infrastructure services has two different impacts on the economy. One through supply-side effect of increasing the capital stock and the other through the demand-side effect of providing additional effective demand. Consumption of infrastructure services also enhances the welfare of poor people. Furthermore, large-scale infrastructure contributes to economic growth that may provide private and public resources to reduce poverty. Therefore, investment in infrastructure by means of PPP has become the need of the day.