Chapter 9 Infrastructure


Basic facilities like roads, power, and water are crucial for a modern economy to run smoothly, whether it’s industry, agriculture, trade, or commerce.

Having good infrastructure helps a country in two big ways:

  • It makes the things we use to make stuff and the quality of our lives better.
  • It boosts how much we can produce.

So, having solid infrastructure is super important for a country to grow economically and for people to have a good life.


9.2.1 Concept of Infrastructure

Infrastructure is like the backbone that supports different services in an economy. It doesn’t make things directly, but it helps a lot in getting things done. Examples of infrastructure are things like transportation, communication, banking, power, and the education and health systems in a country, which include schools, colleges, and health services. Some of these directly impact making goods and services, so we call them economic infrastructure. Others indirectly support making things, and we call them social infrastructure.

9.2.2 Types of Infrastructure

There are two kinds of infrastructure:

  • Economic Infrastructure: This is the stuff that directly helps a country grow economically. It includes things like power, transportation, communication, and banking services. Economic infrastructure makes it faster for a country to develop economically.
  • Social Infrastructure: This is the stuff that indirectly supports a country’s economic growth. It’s about building up the social side of a country, focusing on developing its people, known as human capital. This includes things like schools, healthcare, and other basic social facilities.

The difference between them is given in Table 9.1.

Table 9.1 Difference between Economic and Social Infrastructure

Economic InfrastructureSocial Infrastructure
1. It directly supports the economic system. It helps the economic system from inside.1. It indirectly supports the economic system. It helps the economic system from outside.
2. Example: Energy, transport and communication.2. Example: Health, education and housing.
3. It improves the quality of economic resources and thus raises the production.3. It improves the quality of human resources and thus improves the efficiency of manpower.
4. Expenditure on it will raise the stock of physical capital.4. Expenditure on it will raise the stock of human capital.
5. It will raise the process of economic growth.5. It will raise the process of human development.

Both economic and social infrastructure are complementary to each other. Both are needed for economic development of a country. Economic infrastructure without social infrastructure has no meaning. Also, social infrastructure without economic infrastructure is meaningless.

9.2.3 Importance of Infrastructure

Having good infrastructure is really important for a country’s economic growth, and here’s why:

  • Boosts Productivity: For a country to do well, it needs good farming and factories. Farming needs things like power, credit, and transportation. Factories need machinery, energy, banking services, and more. All these things help make farming and factories more productive.
  • Creates Jobs: Infrastructure provides a lot of jobs for many people in our country.
  • Attracts Foreign Investment: When a country has well-developed infrastructure, it attracts investors from other countries who might not want to invest in a place that lacks basic facilities.
  • Improves Work Skills: Social infrastructure, like education and healthcare, makes people’s lives better. It helps them learn new skills and be more efficient at work.
  • Encourages Outsourcing: Only a country with good infrastructure can become a hub for outsourcing. For example, India is becoming a top spot for outsourcing because it has strong social and economic infrastructure.
  • Expands the Market: With good transportation and communication, the market for buying and selling things can grow, even from faraway places.
  • Boosts Economic Growth: Farming needs good irrigation, and industry needs power, transportation, and communication. If we don’t focus on building up our infrastructure, it can slow down the country’s economic growth.

Objective Type Questions

1.What is the primary purpose of economic infrastructure?
A) Enhancing social development
B) Supporting economic growth
C) Improving education systems
D) Strengthening healthcare services
Answer: B) Supporting economic growth

  1. Which of the following is considered a part of social infrastructure?
    A) Transportation
    B) Communication
    C) Schools
    D) Banking services
    Answer: C) Schools
  2. What role does social infrastructure play in a country’s development?
    A) Directly produces goods and services
    B) Indirectly supports economic growth
    C) Boosts foreign investment
    D) Enhances transportation networks
    Answer: B) Indirectly supports economic growth
  3. How does infrastructure contribute to job creation in a country?
    A) By improving healthcare
    B) By attracting foreign investment
    C) By boosting productivity
    D) By expanding the market
    Answer: C) By boosting productivity
  4. Why is well-developed infrastructure attractive to foreign investors?
    A) Improves work skills
    B) Creates jobs
    C) Boosts economic growth
    D) Provides basic facilities
    Answer: D) Provides basic facilities
  5. Which country is mentioned as a top spot for outsourcing due to its strong infrastructure?
    A) China
    B) Brazil
    C) India
    D) Russia
    Answer: C) India
  6. What aspect of a country’s infrastructure encourages the expansion of markets?
    A) Good healthcare services
    B) Efficient communication and transportation
    C) Strong banking services
    D) Skilled workforce
    Answer: B) Efficient communication and transportation
  7. How does social infrastructure contribute to improving work skills?
    A) By creating jobs
    B) By boosting productivity
    C) By enhancing education and healthcare
    D) By attracting foreign investment
    Answer: C) By enhancing education and healthcare
  8. What is the impact of lacking infrastructure on a country’s economic growth?
    A) Accelerates economic growth
    B) Slows down economic growth
    C) Attracts foreign investment
    D) Creates more jobs
    Answer: B) Slows down economic growth
  9. What is the main focus of economic infrastructure?
    A) Developing human capital
    B) Enhancing social development
    C) Supporting economic growth
    D) Boosting productivity
    Answer: C) Supporting economic growth

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