Social and Physical Infrastructure in India: Constraints to Rapid Growth

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INTRODUCTION A country's level of human and economic development is closely related to its levels of achievement in physical and social infrastructure. While physical infrastructure is an important determinant of domestic production, good social infrastructure is vital for human development as well as economic progress through better educated, better skilled and healthier citizens. Education and health are the main constituents of social infrastructure. Many studies document the contribution of education and health to economic development in which they are considered investments in human capital comparable to physical means of production, such as factories and machines. The economic attainments of Europe, North America, Japan and East Asia are inconceivable without their attainments in human capital; hence, the importance of social infrastructure. Therefore, it can be surmised that investment in human capital through education, training, health and medical facilities yields additional output and economic returns. Economic growth theory also sees human capital as an important source of economic growth. Further, to achieve rapid economic growth, it is essential that the population should be well-educated and trained to be able to work effectively. It is also essential for reducing poverty. No amount of welfare measures can help a poor illiterate person the way education can by enabling him to become more productive and skilled. Therefore, effective education for the masses is crucial for reducing poverty and sustaining high rates of economic growth over long periods by providing a well-skilled labour force. The role of physical infrastructure in promoting economic development has been well-documented in the literature [Estache (2006), Sahoo and Dash (2008, 2009)]. Physical infrastructure not only contributes to enhance productivity, but it also assists in the realization of the potential ability of human capital and creates situations in which the potential can fully function. It also directly and indirectly contributes towards improving the quality and safety of people's lives. Within the scope of infrastructure, roads, railways, air transportation, seaports, electric power and telecommunications and information technology are often used as services and intermediate goods essential for the productive processes of the manufacturing, agriculture and services sectors.