Infrastructure and Growth

Apart from natural resources, demographic characteristics and the political environment, the availability of infrastructure, both social and physical, plays a crucial role in influencing India’s growth trajectory. The 12th five-year plan accords infrastructure development — especially road connectivity, schools, health facilities and the availability of electricity — as a key component of the regionally inclusive development strategy. The objective of the 12th five-year plan is to secure faster, more inclusive and sustainable growth. Apart from developing human and institutional capabilities; the plan lays stress on development of infrastructure which will act as a general capability enhancer to realize the plan’s objectives. Notwithstanding the importance attached to infrastructure, there has been very little attempt to empirically decipher the impact of infrastructure on growth. The prime reason for the absence of serious empirical work is the ‘data hurdle’. Obtaining reliable and consistent data on the availability of infrastructure at the state level continues to be a daunting task.