Page 225 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Unit 19: Sectoral Performance II: Role of Infrastructure in Economic Development

communications, the extensive use of cargo and later oil as source of energy, tremendous expansion Notes
in banking, insurance and other financial institution to finance production and trade, an explosion
knowledge of science and technology, and so on.
Infrastructural facilities—often referred to economic and social overheads—consist of :
(a) Irrigation, including flood control and comman area development.
(b) Energy : coal, electricity, oil and non-conventional sources.
(c) Transport : Railways, roads, shipping and civilaviation.
(d) Communications : Posts and telegraphs, tele phones, telecommunications, etc.
(e) Banking, finance and insurance.
(f) Science and technology.
(g) Social overheads : health and hygiene and education
Growth of Infrastructure since Independence
Indian planners were fully aware of the link between infrastructural facilities and general economic
development and, accordingly, they gave high priority the rapid expansion of these facilities right from
the First plan itself. The plans have generally devoted over 50 per cent of the total plan outlay on
infrastructure development. As a result, there has been phenomenal increase in infrastructural facilities.
For instance, coal production including lignites rose from 32 million tonnes to 566 million tonnes
between 1951 and 2010. During the same period, power generation from public utilities, excluding
power generation from captive and non-conventional power plants rose from 5 billion kwh in to 768
billion kwh; and production of petroleum crude rose from an insignificant 0.4 million tonnes to over
34 million tonnes. Likewise, there has been tremendous expansion in the other infrastructural facilities.
19.2 Energy

The most important single factor which can act as a constraint on economic growth of a country is the
availability of energy. India is both a major energy producer and consumer. Currently, India ranks as
the world’s seventh largest energy producer and fifth largest energy consumer.
There is a direct correlation between the degree of economic growth, the size of per capita income
and per capita consumption of energy. Table 2 based on World Development Report shows per
capita income and per capita consumption of energy of six countries :
In Table 1, the first three countries are developing countries with low per capita incomes, while the
next three are developed countries with high per capita incomes. The per capita consumption of
energy in India in 2003 was 529 kg of oil equivalent (Kgoe) as compared to 1,484 in China. On the
other hand, per capita consumption of energy was as much as 3,464 in England, 4,019 in Japan and
7,766 in U.S.A. Per capita consumption of energy in India was only 13 per cent of that in Japan, and
only 6.8 per cent of that in the U.S.A. Although per capita commercial energy consumption in India
has been steadily going up during the last 2 decades, it is still one of the lowest in the whole world (26
per cent of the world average of 1,750 kg).
Table 1 : Per capita income and per capita consumption of energy for selected countries

Country Per capita income Per capita consumption
(in U.S. dollars) of energy (kgs. of oil
2008(ppp) equivalent)2007

India 2,930 529
China 6,010 1,484
U.K 36,240 3,464
Japan 35,190 4,019
U.S.A. 46,790 7,766

Source : World Development Report, 2009 and World Development Indicators (2010)

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