Energy, Infrastructure
and Communications
CHAPTER
9
Physical infrastructure has a direct bearing on sustainability of growth and overall
development. The economic miracle of the high-growth Asian economies was
accompanied by substantial investments in infrastructure. Evidence also suggests
that creation of infrastructure, through its direct and indirect effects, has a significant
impact on poverty reduction. In the Indian context, though there has been some
improvement in infrastructure development in transport, communication and energy
sectors in recent years, there are still significant gaps that need to be bridged. The
current economic slowdown provides an opportunity for countries like India that
have a substantial degree of unmet infrastructure requirements. This is reinforced
by the understanding that spending on infrastructure has large multiplier effects.
9.2
Development of infrastructure would not
only ameliorate the supply side bottlenecks to
growth, but also provide the requisite demand side
stimulus to growth. The rapid construction of
highways facilitates human and material movement
across the country. Apart from improving
connectivity, the development of secondary and
tertiary roads can open up hitherto unconnected
regions to trade and investment and step up access
to goods, services and employment opportunities.
The role of civil aviation and shipping is central to
furthering trade, external commercial opportunities,
domestic business and industrial growth. The rapid
growth in tele-connectivity and tele-density has
already ushered in a communication revolution,
though there is still enormous scope for expansion.
Against this background, this chapter reviews the
current pace of development of infrastructure,
energy and communications in India. The review of
progress in physical infrastructure is combined with
energy and communications in view of the close
inter-linkages between these sectors.
OVERVIEW OF PERFORMANCE
9.3
The capacity creation in infrastructure
sectors presented a mixed picture in 20