Infrastructure Development In India Economics Essay

Published: November 21, 2015 Words: 2471

The major contribution of Infrastructure in five year plans

Infrastructure Sector Growth Rate in India GDP came to 3.5% in 1996- 1997 and the next year, this figure was 4.6%. The Growth Rate of the Infrastructure Sector in India GDP increased after the Indian government opened the sector to 100% foreign direct investment (FDI). This was done in order to boost the Infrastructure Sector in the country. The result of opening the sector to the private sector has been that Infrastructure Sector Growth Rate in India GDP has increased at the rate of 9%. It is estimated that the Growth Rate of the Infrastructure Sector in India GDP will grow at the rate of 8.5% between 2006 and 2010. The biggest ongoing project in the Infrastructure Sector in India is the Golden Quadrilateral, which is improving the main roads that connect the four cities of Chennai, Mumbai, Delhi

First plan (1951-1956)

The first Indian Prime Minister, Jawaharlal Nehru presented the first five-year plan to the Parliament of India on 8 December 1951. The first plan sought to get the country's economy out of the cycle of poverty. The plan addressed, mainly, the agrarian sector, including investments in dams and irrigation. The agricultural sector was hit hardest by the partition of India and needed urgent attention.[2] The total planned budget of 206.8 billion INR (23.6 billion USD in the 1950 exchange rate) was allocated to seven broad areas: irrigation and energy (27.2 percent), agriculture and community development (17.4 percent), transport and communications (24 percent), industry (8.4 percent), social services (16.64 percent), land rehabilitation (4.1 percent), and for other sectors and services (2.5 percent).[3]

The target growth rate was 2.1 percent annual gross domestic product (GDP) growth; the achieved growth rate was 3.6 percent

Second plan (1956-1961)

Hydroelectric power projects and five steel mills at Bhilai, Durgapur, and Rourkela were established. Coal production was increased. More railway lines were added in the north east.

The Atomic Energy Commission was formed in 1958 with Homi J. Bhabha as the first chairman. The Tata Institute of Fundamental Research was established as a research institute. In 1957 a talent search and scholarship program was begun to find talented young students to train for work in nuclear power.

Third plan (1961-1966)

The construction of dams continued. Many cement and fertilizer plants were also built. Punjab began producing an abundance of wheat.

Many primary schools were started in rural areas. In an effort to bring democracy to the grassroot level, Panchayat elections were started and the states were given more development responsibilities.

State electricity boards and state secondary education boards were formed. States were made responsible for secondary and higher education. State road transportation corporations were formed and local road building became a state responsibility. The target growth rate of GDP(gross domestic product)was 4.5 percent.The achieved growth rate was 4.3 percent.[citation need

Fifth plan (1974-1979)

Electricity Supply Act was enacted in 1975, which enabled the Central Government to enter into power generation and transmission

The Indian national highway system was introduced for the first time and many roads were widened to accommodate the increasing traffic. Tourism also expanded.

The sixth plan also marked the beginning of economic liberalization

Eighth plan (1992-1997)

The major objectives included, containing population growth, poverty reduction, employment generation, strengthening the infrastructure, Institutional building,tourism management, Human Resource development, Involvement of Panchayat raj, Nagarapalikas, N.G.OSand Decentralisation and people's participation. Energy was given prority with 26.6% of the outlay. An average annual growth rate of 6.7% against the target 5.6% was achieved

Ninth Plan (1997 - 2002)

The main objectives of the Ninth Five Year Plan India are:

to prioritize agricultural sector and emphasize on the rural development

to generate adequate employment opportunities and promote poverty reduction

to stabilize the prices in order to accelerate the growth rate of the economy

to ensure food and nutritional security

to provide for the basic infrastructural facilities like education for all, safe drinking water, primary health care, transport, energy

to check the growing population increase

to encourage social issues like women empowerment, conservation of certain benefits for the Special Groups of the society

to create a liberal market for increase in private investments

During the Ninth Plan period, the growth rate was 5.35 per cent, a percentage point lower than the target GDP growth of 6.5 per cent.

Tenth plan (2002-2007)

Economic Growth further accelerated during this period and crosses over 8% by 2006.

Eleventh plan (2007-2012)

Infrastructure

Ensure electricity connection to all villages and BPL households by 2009 and round-the-clock power.

Ensure all-weather road connection to all habitation with population 1000 and above (500 in hilly and tribal areas) by 2009, and ensure coverage of all significant habitation by 2015

Connect every village by telephone by November 2007 and provide broadband connectivity to all villages by 2012

Provide homestead sites to all by 2012 and step up the pace of house construction for rural poor to cover all the poor by 2016-17

Various sectors in infrastructure

Power

Against Eleventh Plan target for additional power generation capacity of 78,577 MW Commercial Operation Date (COD) on about 10,000 MW to be achieved by end March 2008.

Ultra Mega Power Project (UMPP): Fourth UMPP at Tilaiya to be awarded shortly; Chhattisgarh, Karnataka, Maharashtra, Orissa and Tamilnadu urged to bring five more UMPPs to the bidding stage by extending the required support.

Rajiv Gandhi Grameen Vidyutikaran Yojana to be continued during the Eleventh Plan period with a capital subsidy of Rs.28,000 crore; allocation of Rs.5,500 crore for 2008-09.

Accelerated Power Development and Reforms Project: Rs.800 crore to be provided in 2008-09, A National Fund for transmission and distribution reform to be created.

Roads

National Highway Development Programme (NHDP): Allocation for NHDP enhanced to Rs.12,966 crore in 2008-09 from Rs.10,867 crore in 2007-08; Completion rate in the Golden Quadrilateral is 96.48 per cent and in the North South, East West Corridor project is 23.36 per cent; Special attention being paid to SARDP-NE; programme devised for the North Eastern region; 180 kms of roads completed in 2007-08 and 300 kms. of road targetted for completion in 2008-09.

Oil and Gas

Seventh round of bidding under the New Exploration Licensing Policy; bids invited for 57 exploration blocks; estimated to attract investment of the order of US$3.5 billion to US$8 billion for exploration and discovery.

Coal

53 coal blocks with reserves of 13,842 million tonnes allotted during April-January 2007-08 to Government and private sector companies; new Coal Distribution Policy notified in October 2007; coal regulator to be appointed.

Information Technology

Allocation to the Department of Information Technology enhanced to Rs.1,680 crore in 2008-09 from Rs.1,500 crore in 2007-08; Two Schemes for establishing 100,000 broadband internet-enabled Common Service Centres in rural areas and State Wide Area Networks (SWAN) with Central assistance under implementation; new scheme for State Data Centres also approved; Rs.75 crore provided for the common service centres; Rs.450 crore provided for SWAN and Rs.275 crore for the State Data Centres.

India Transport Sector

India's transport sector is large and diverse; it caters to the needs of 1.1 billion people. In 2007, the sector contributed about 5.5 percent to the nation's GDP, with road transportation contributing the lion's share.

Good physical connectivity in the urban and rural areas is essential for economic growth. Since the early 1990s, India's growing economy has witnessed a rise in demand for transport infrastructure and services.

However, the sector has not been able to keep pace with rising demand and is proving to be a drag on the economy. Major improvements in the sector are required to support the country's continued economic growth and to reduce poverty.

Railways. Indian Railways is one of the largest railways under single management. It carries some 17 million passengers and 2 million tonnes of freight a day in year 2007 and is one of the world's largest employers. The railways play a leading role in carrying passengers and cargo across India's vast territory. However, most of its major corridors have capacity constraint requiring capacity enhancement plans.

Roads. Roads are the dominant mode of transportation in India today. They carry almost 90 percent of the country's passenger traffic and 65 percent of its freight. The density of India's highway network -- at 0.66 km of highway per square kilometer of land - is similar to that of the United States (0.65) and much greater than China's (0.16) or Brazil's (0.20). However, most highways in India are narrow and congested with poor surface quality, and 40 percent of India's villages do not have access to all-weather roads.

Rural Roads- A Lifeline for Villages in India: Connecting Hinterland to Social Services and markets

Ports. India has 12 major and 187 minor and intermediate ports along its more than 7500 km long coastline. These ports serve the country's growing foreign trade in petroleum products, iron ore, and coal, as well as the increasing movement of containers. Inland water transportation remains largely undeveloped despite India's 14,000 kilometers of navigable rivers and canals.

Aviation. India has 125 airports, including 11 international airports. Indian airports handled 96 million passengers and 1.5 million tonnes of cargo in year 2006-2007, an increase of 31.4% for passenger and 10.6% for cargo traffic over previous year. The dramatic increase in air traffic for both passengers and cargo in recent years has placed a heavy strain on the country's major airports.

Passenger traffic is projected to cross 100 million and cargo to cross 3.3 million tonnes by year 2010.

Transport infrastructure in India is better developed in the southern and southwestern parts of the country.

Coal Industry

Coal Industry highlights:

India is the third largest producer of coal in the world.

Coal is one of the primary sources of energy, accounting for about 67% of the total energy consumption in the country.

India has the fourth largest reserves of coal in the world (approx. 197 billion tonnes.).

Coal deposits in India occur mostly in thick seams and at shallow depths. Noncoking coal reserves aggregate 172.1 billion tonnes (85 per cent) while coking coal reserves are 29.8 billion tonnes (the remaining 15 per cent).

Indian coal has high ash content (15-45%) and low calorific value.

With the present rate of around 0.8 million tons average daily coal extraction in the country, the reserves are likely to last over a 100 years.

The energy derived from coal in India is about twice that of energy derived from oil, as against the world, where energy derived from coal is about 30% lower than energy derived from oil.

As of 2003, India has 19 coal washeries (total capacity:27.2 million tonnes per annum) of which 15 are owned by CIL.

The use of beneficiated coal has gained acceptance in steel plants and power plants located at a distance from the pithead.

Energy and Environment

27 November 2006, Forbes magazine

China

India

Recoverable Coal Reserves

126,214.7 million short tons

101,903.2 million short tons

Coal Production

2,156.4 million short tons

403.1 million short tons

Coal Consumption

2,062.4 million short tons

430.6 million short tons

THERMAL & HYDRO)

The present installed capacity of electric power generation plants in India is of about 127 GW and is dominated by thermal (66%) and hydro (26%) plants. It is expected that the dominance of thermal and hydro power stations would continue even with the ambitiously planned total capacity addition to a level of about 203 GW by year 2011-2012. This article briefly touches upon opportunities for power generation up to XI Five - Year Plan, inherent weaknesses of prevailing systems and processes in India to meet the targets and addressing some of the critical issues to overcome the impediments.

Wind energy

Rank

Nation

2002

2003

2004

2005[2]

2006[2]

2007[2]

2008[2]

2009[3]

1 Yr %

growth

5 Yr avg

% growth

-

World

31,180

39,295

47,693

59,024.1

74,150.8

93,926.8

121,187.9

157,899

30.3

25.3

-

European Union

40,722

48,122

56,614

65,255

74,767

12.1

1

United States

4,685

6,370

6,725

9,149

11,603

16,818.8

25,170.0

35,159

39.7

31.6

2

Germany

12,001

14,609.1

16,628.8

18,427.5

20,622

22,247.4

23,902.8

25,777

7.8

10.3

3

China

468

567

764

1,266

2,599

5,912

12,210.0

25,104

105.6

84.8

4

Spain

4,830

6,202

8,263

10,027.9

11,630

15,145.1

16,740.3

19,149

14.4

22.0

5

India

1,702

2,110

3,000

4,430

6,270

7,850

9,587.0

10,925

14.0

35.4

Iron and steel

Production of Iron & Steel

(a)Finished Carbon Steel Production

The total production of finished carbon steel in the country has been 59.02 million tonnes in 2008-09 as compared to 14.33 million tonnes in 1991-92. The high share of the secondary sector in finished steel production is largely due to substantial supplies of semis, the basic feed material from the main producers for conversion to needed shapes by rolling.

PRODUCTION OF FINISHED CARBON STEEL (In million tonnes)

Year

Main

Producers

Secondary

Producers

Grand

Total

% of share of

Secondary Producers

1991-1992

7.96

6.37

14.33

14.5%

1992-1993

8.41

6.79

15.20

44.7%

1993-1994

8.77

6.43

15.20

42.3%

1994-1995

9.57

8.25

17.82

46.3%

1995-1996

10.59

10.81

21.40

50.6 %

1996-1997

10.54

12.18

22.72

53.6 %

1997-1998

10.44

12.93

23.37

55.32 %

1998-1999

9.86

13.24

23.82

57.32 %

1999-2000

11.20

15.51

26.71

58.07 %

2000-2001

12.51

17.19

29.7

57.88 %

2001-2002

13.05

17.58

30.63

57.40 %

2002-2003

14.39

19.28

33.67

57.27 %

2003-2004

15.19

21.00

36.19

58.03 %

2004-2005

15.61

24.44

40.05

61.02 %

2005-06 (Prov.)

16.236

26.400

42.636

61.92 %

2006-2007

17.390

37.756

55.146

68.46 %

2007-2008

17.765

40.565

58.233

69.54 %

2008-2009

17.020

42.000

59.02

71.16 %

2009-2010

(Apr-Dec)

(Prov)

12.887

35.224

48.111

73.21 %

(Source : JPC)

IT Infrastructure in India

Indian Software Industry:

The Indian software industry in 1997-98 had revenues of about $3billion. Though small compared to the world market for software, it has been growing at an annual rate of about 50% during the past five years. Most of the Indian firms are small and young, and are involved exclusively in software development. In India the growth of software development companies are comparatively higher than the hardware companies. Table below shows the data regarding growth in software design, development and services in the past few years.

2000-2001

$billion

2001-2002

$billion

2002-2003

$billion

2003-2004

$billion

CAGR

200-04 %

Domestic

2.1

2.3

2.7

3.3

17.5

Exports

6.2

7.6

9.5

12.2

25.1

Total Software

8.3

9.9

12.3

15.5

23.4

Growth in Indian Software Industry

Today Indian IT industry is growing at a vertiginous rate. Indian software output is nearing to world software and it has reached up to $16billion (Countries like Ireland and Israel are also doing equally well). The growth in software Industry has created over a million jobs for professionals and many more at the support level.

A decade ago, the entire country hosted just four or five IBM mainframe computers. Last year the industry notched up sales of $16 billion, three-quarters of which went abroad, according to NASSCOM, by 2008, the annual sales are likely to surpass $50 billion.