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Infrastructure: Meaning, Characteristics, Importance and Types

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  • Last Updated : 31 Jan, 2023
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Imagine a world without electricity, medical facilities, nursing homes, or any form of transportation or communication. The absence of these items would simply return us to an ancient age where production was solely necessary for survival. Production did not result in a surplus for expansion and development. Infrastructure is crucial for a country’s economic development. The infrastructure of a country is the framework that helps it develop economically and socially. The infrastructure facilities are crucial for the development of agriculture, industry, and now, increasingly, the services sector. Social development also depends on the development of the infrastructure. Since India’s economic reforms in 1991, the government has placed a significant emphasis on infrastructure development. 

What is Infrastructure?

Infrastructure refers to all such activities, services, and facilities needed to provide different kinds of services in an economy. Simply put, it is the support system for the economic and social development of the country. 

Characteristics of Infrastructure

The basic characteristics of Infrastructure are as follows:

1. The primary sectors of industrial and agricultural output, as well as local and international trade and commerce, are supported by infrastructure.

2. Infrastructure services include:

  • Roads, railways, ports, airports, oils and gas pipelines, telecommunication facilities, power stations, etc.
  • Health system including hospitals.
  • Education system involving schools and colleges.
  • Sanitary system embracing clean drinking water facilities.
  • A monetary system involving banks, insurance, and other financial organizations.

3. Some of these services directly affect how the production system functions, while others benefit the economy indirectly by fostering the social sector.

Importance of Infrastructure 

Infrastructure is a system of support essential to the effective operation of a modernised industrial economy. The following points provide illustrations of the importance of the infrastructure:

1. Facilitates Economy’s Operation: 

The presence of infrastructure facilities is necessary for the effective functioning of an economy. Infrastructure facilities are crucial for the development of the agricultural, industrial, and service sectors.

2. Development of Agriculture:

The development of modern agriculture is dependent on the availability of infrastructure for the rapid and large-scale transportation of seeds, herbicides, fertilizers, and other agricultural inputs. Additionally, in order for agriculture to function on a large scale, banking and insurance institutions are required.

3. Investment is Stimulated by Infrastructure:

Investment is promoted by infrastructure. For instance, a well-developed transportation system would undoubtedly encourage investment in all economic sectors. Because it enables effective transportation of products and services across the different areas of the nation. In truth, the foundation of commercial investment is infrastructure.

4. Infrastructure Improves Productivity:

Social infrastructure includes institutions for learning and health care. These organizations provide healthcare, skill development, and education which are necessary conditions to improve productivity. This implies an increase in efficiency and, as a result, an increase in productivity. Also, the growing process is consequently accelerated.

5. Creates Job Opportunities:

Infrastructure has a role in job creation. Many people find work in infrastructure projects, including the building and upkeep of roads, power plants, electricity, etc. After the creation of a solid infrastructure, many more individuals are able to find jobs in industry and trade.

6. Enables Outsourcing:

A nation that has developed infrastructure can profit from work that is outsourced. Due to its strong infrastructure and IT support system, India is becoming a popular location for BPOs, KPOs, call centres, and other similar businesses.

7. Better Living Quality:

Better life quality is a result of well-developed infrastructure.

  • The morbidity from major waterborne diseases and the severity of the sickness are both significantly decreased by improvements in water supply and sanitation.
  • Access to healthcare depends on the state of the transportation and communication networks. However, air pollution and transportation-related safety risks might have an impact on morbidity, especially in densely populated areas.

Morbidity Rate is the propensity to fall ill. This may affect the worker’s productivity. Besides, in densely populated areas, activities like air pollution and safety hazards connected to transportation affect morbidity. 

8. Economic Development:

Infrastructure development and economic development are interlinked. Infrastructure helps in contributing to the economic development of a country by increasing the productivity of factors of production and by improving the quality of life of the people. 

  • The creation and extension of irrigation infrastructure are essential for agriculture.
  • The growth of power and electricity generation, transportation, and communication is necessary for the advancement of industries.

Infrastructural growth and the National Income of an economy have a positive correlation between them. Infrastructure acts as a support system for an economy facilitating greater productive activities, improvement of quality of life, and a higher level of income or output in an economy.

Types of Infrastructure 

The infrastructure can be categorized into:

1. Economic Infrastructure:

It includes the infrastructure associated with energy, transportation, and communication. Under this, promoting activities like the production and trade of goods and services is essential. Besides, economic infrastructure has a direct positive impact on the process of production and distribution in an economy. Simply put, this infrastructure provides direct support to the economic system.

2. Social Infrastructure: 

It includes the infrastructure associated with education, health, and housing. It entails offering all services that enhance the quality of human resources. Social infrastructure does not have a direct influence on the economic system; however. it indirectly impacts the economy by achieving some social objectives. 

Economic development involves social implications in addition to simply increasing gross domestic product. Due to this, the process of economic development is strongly influenced by both social and economic infrastructure.

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