Importance of Infrastructure class 12 Economics

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What is the importance (significance) of Infrastructure

Following are the importance

Improves the Quality of life of People

Quality of life of the people is improved by the facilities concerning health, education, housing and sanitation, and environment, etc., available in the country. These enable the people to avail better opportunities of employment and raise their standard of living.

Facilitates Functioning of the economy

The functioning of an economy depends on the existence of infrastructural facilities. Agriculture, industry, and service sectors depend heavily on infrastructural facilities for their growth.

Raise Productivity

Infrastructural facilities help in raising productivity.

Social infrastructure improves the quality of human resources, i.e., workers and producers. Good health and education help the human resources in acquiring better skills and raise their efficiency.

Economic infrastructure, in the form of power, transport, telecommunication, etc., creates conditions suitable for carrying out economic activiites.

Therefore, better quality oflife and better economic environment together help in raising productivity and bring down costs of production.

Expansion of Trade and Industry

Better roads, continuous power supply, countrywide communication system, etc. all lead to free movement of capital, goods and people throughout the country and outside the country.

It helps in markets to spread over the country and the world and come closer to each other. This in turn expands trade.

Provides Employment:-

Infrastructure helps in generating employment. Many People get employment in infrastructural projects like construction and maintenance of roads, railways, electivity plants etc.

Many more people are able to find employment in industry and trade, after the development of strong infrastrucure.

Facilitates Outsourcing:-

A country with advanced infrastructure facilities, is able to read benefits from the outsourcing work. India is emerging as a global destination for BPO’s KPO’s call centres, etc. due to IT support system and sound infrastructure.

Infrastructure Induces Investment:-

Infrastructure induces investment. for example, A developed network of highways would definitely induce investment across all sectors of the economy.

Because, it facilitates efficient movement of goods and services across different regions of the country.

Infrastructure generates linkages in Production:-

Developed measn of transport and communication, ample sources of energy along with good facilitates of banking and insurance would generate inter-industrial linkages.

It is a situation when expansion of one industry facilitates the expansion of the other.

Infrastructure Enhances Size of the Market

We know, large scale production is possible only when size of the market is large.

Infrastructure enhances size of the market. It was with a view to expanding size of the market for the British products in India that a network of railways was developed under the British Raj.

Infrastructure Enhanves ability to work

Here, wer are referring to social infrastructure. It includes educational and medical institutions. These institutions promote education, skill formation and healthcare. These are essential parameters to enhance the ability to work.

It imply a rise in efficiency and therefore, a rise in productivity

Infrastructure Induces FDI

Good infrastrucutre attracts foreign investers and manufacturing companies to set up their plant in the country. Since 1991 economic reforms, India has been attracting FDI. But after 2014 modi government, there is a huge acceleration in FDI as this government primary focus to expand country’s infrastructure at tremendous pace.

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Anurag Pathak

Anurag Pathak is an academic teacher. He has been teaching Accountancy and Economics for CBSE students for the last 18 years. In his guidance, thousands of students have secured good marks in their board exams and legacy is still going on. You can subscribe his youtube channel and can download the Android & ios app for free lectures.

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