Answer: 

Introduction:

Basic infrastructure facilities in the country provide the foundation of growth. In the absence of adequate infrastructure, the economy operates at suboptimal levels and remains distant from its potential and frontier growth trajectory.

Body:

Investment in infrastructure is essential for more rapid and inclusive economic growth:

• Creation of Jobs: Infrastructure development such as road construction, real estate, railway construction, etc. is labour intensive, leading to increase in employment opportunities in formal and informal sectors and thus, fuelling domestic demand.
  • MGNREGA is a shining example of this aspect.
• Multiplier effect: Capital expenditure has a multiplier of 2.45 and hence it would revive both demand and supply leading to expeditious economic growth and more employment opportunities.
  • The National Infrastructure Pipeline (NIP) for FY 2019-25 aims to provide world-class infrastructure to citizens and improve their quality of life.
• Improved connectivity: Infrastructure investment leads to improved connectivity within and between regions, which in turn leads to greater economic integration and interdependence. This can lead to increased trade and commerce, which can drive economic growth.
  • Example: Bharatmala and Sagarmala projects, Transit corridors, etc.
• Logistic Cost: Building world class roads, railways, ports, inland waterways, will cut down logistic costs and improve competitiveness and promote exports. Currently, Indian logistic cost is around 12-14% of GDP while the benchmark is 7-8% of GDP.
  • Gati Shakti scheme or National Master Plan for multi-modal connectivity plan with the aim of coordinated planning and execution of infrastructure projects will bring down logistics costs.
• Farmer’s Income: Investment in infrastructure would play a critical role in ensuring doubling of farmers income through focus on increased irrigation infrastructure and storage, processing and marketing infrastructure.
• Inclusive growth: Infrastructure investment can also contribute to more inclusive growth by providing access to education, healthcare, and other social services to underserved or disadvantaged communities.
  • For instance, Pradhan Mantri Awas Yojana (Housing for All by 2022) aims at providing a pucca house with basic amenities to all houseless households living in kutcha and dilapidated houses by 2022.
• Increased productivity: Infrastructure investment also leads to increased productivity as it enables the smooth flow of goods and services, reduces transaction costs and enhances the efficiency of production processes.

Conclusion:

Infrastructure lies at the core of India’s ability to realise a number of SDGs, both directly and indirectly. Hence, going forward, various initiatives such as NIP, Gati Shakti, NMP, NaBFID etc. need to be implemented efficiently to lay down a strong foundation for a truly Aatmanirbhar Bharat.