Infrastructure (or the lack thereof!) is probably the biggest issue that affects the economy as a whole as well as the day-to-day life of the common man. Power cuts, water shortages and traffic snarls are now considered the norm in
It is estimated that inadequate infrastructure is responsible for holding back GDP growth by roughly 2% points, or an annual hit of approximately $20 billion to economic progress.
In contrast, infrastructure is one of the reasons why
Chinese industries pay less than half of what their Indian counterparts pay for power. Logistics costs in
The benefits of infrastructure need no elaboration. Put simply, infrastructure reduces the cost of doing business, thereby expanding trade. The impact can be felt even at the grassroots level. For example, a farmer who used to be dependent on the nearest market to sell his produce (for lack of information and transportation), can now ascertain the prevailing prices in multiple markets and access the one that offers the best price.
Credit should go to the telecom revolution as well as recent improvements in the road transportation network (which still has a long way to go). We need to replicate these positive experiences on a much larger scale, in areas such as power, ports, irrigation and urban infrastructure, to name a few.
The country has no alternative but to invest heavily in infrastructure in order to compensate for decades of under-investment, especially with the economic engine humming and the cost-benefit being evident. In an ideal scenario, better infrastructure would lead to stronger economic growth, which in turn, would be able to fund and support additional investments in infrastructure, creating a virtuous cycle.
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