from Section 4 - The supply constraints to growth
Published online by Cambridge University Press: 18 December 2015
INTRODUCTION
India is the fourth largest economy in the world. However, one factor which is a drag on its development is the lack of world-class infrastructure. In fact, estimates suggest that the lack of proper infrastructure pulls down India's Gross Domestic Product (GDP) growth by 1–2 per cent every year. Physical infrastructure has a direct impact on the growth and overall development of an economy. However, the fast growth of the Indian economy in recent years has placed increasing stress on physical infrastructure, such as electricity, railways, roads, ports, airports, irrigation, urban and rural water supply, and sanitation, all of which already suffer from a substantial deficit. The goals of inclusive growth and a 9 per cent growth in GDP can be achieved only if this infrastructure deficit is overcome. Infrastructure development will help in creating a better investment climate in India. To develop infrastructure in the country, the government is expected to revisit issues of budgetary allocation, tariff policy, fiscal incentives, private sector participation and public–private partnerships (PPPs) with resolve.
There are many issues that need to be addressed in different infrastructural fields. To begin with, the gap between electricity production and demand is affecting both manufacturing and overall growth. Then, though road transport is the backbone of the Indian transport infrastructure, it is inadequate in terms of quality, quantity and connectivity. Also, in the overall transport sector, civil aviation and ports desperately need modernization. It is expected that the public sector will continue to play an important role in building transport infrastructure. However, the resources needed are much larger than what the public sector can provide. Rest of the chapter is organized as follows. The first section of Chapter 1 gives a brief description of infrastructure development in the Twelfth Five Year Plan. Its second section explains in detail a few important sources of infrastructure financing in the country.
To save this book to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.
Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.
Find out more about the Kindle Personal Document Service.
To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.
To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.