Indian Economy and Indian Financial System.

Module – A. Indian Economic Architecture.

Unit 5: Infrastructure Including Social

Infrastructure.

Infrastructure Including Social Infrastructure.

Infrastructure investment increases the capital stock required for
economic development.

Historically, infrastructure in India has always been funded by the

government.

However, considering the paucity of public resources and the necessity to

redirect precious public resources to health and education, attempts have
been made to encourage private sector investment in the development of
this infrastructure.

Currently, the source of finance differs greatly between sectors.

Government Monopoly – Railway & Nuclear Power.

Industries dominated by government spending.

Overseas Development Aid.

Private Sector Investment.

P P P.

N I I F (National Investment & Infrastructure Fund).

Infrastructure & Economic Development.

Infrastructure is the foundation for economic growth, and it encompasses
the physical, natural, and organisational structures required for long-
term economic development.
Economic infrastructure facilitates labour and capital mobility, within and
between economies.

Infrastructures provide a large number of job creations and possibilities.

The availability of high-quality infrastructure ensures a rise in output and

productivity.

Facilitates the circulation of commodities and raw materials, eliminating

inefficiencies and resulting in the effective use of scarce resources.

Infrastructures include.
 Roads,
 Ports,
 Airports,
 Bridges,
 Railways,
 Water supply,
 Sewerage,
 Power,
 Telecommunications
 Irrigation, and so on.
A solid infrastructure facilitates the production of high-quality goods and
services, as well as the transport of finished items to marketplaces and builds
essential social institutions such as schools and hospitals. Infrastructure can
be either Hard or soft.

It is also segregated as physical and social infrastructure.

Hard Infrastructure: Refers to major physical networks such as roads,

ports, airports, pipelines, etc., that are required for the operation of a modern
industrial nation.

Soft Infrastructure: Refers to institutions that are essential to keep the

economy running, such as financial, educational, healthcare, and law-
enforcement organisations.

High quality Goods & Services,

Finished Iteam to Marketplace.

Social Infrastructure.
Energy, Power, Transport System, Viz., Rail, Road, Civil
Aviation.
Some of the major infrastructures are presented below.

Energy Infrastructure.
Energy infrastructure is the organizational framework that permits
large-scale energy transmission from producer to consumer, as well
as energy flow direction and management. Many components make up
energy infrastructure: Natural gas pipelines, storage and distribution
terminals; petroleum pipelines, specialized coal handling facilities for
washing, storing, and transporting coal; renewable energy infrastructure,
such as wind power, solar power, hydro power, geothermal power,
and biomass or biofuel facilities, etc.

Renewable Energy.
India has achieved a cumulative installed renewable energy capacity
(excluding large hydro) of 92.54 GigaWatts out of which 5.47
GigaWatts was added in the period April 2020 till January, 2021.
During the period from April 2014 to January 2021, the installed RE
capacity of India has increased by two-and-half times, and in the same
period, the installed solar energy capacity has increased 15 times.

Water Management Infrastructure.

 This comprises drinking water supply, wastewater collection and
disposal, drainage systems, major irrigation systems (reservoirs,
irrigation canals), major flood control systems, and other
infrastructure.
 Untreated sewage waste is one of the major causes of surface water
and groundwater pollution in India. The Water (Prevention and
Control of Pollution) Act, 1974 was the first legislative measure
taken to directly address the issue of water pollution and
conservation in the country. This Act provides for establishing
Central and State Pollution Control Boards responsible for the
prevention and control of water pollution.

Communications Infrastructure.
 Communication infrastructure includes postal services, telephone
networks, including mobile phone networks, television and
radio broadcast stations, the internet, communication satellites, and
so on.
 Few of the initiatives taken by Government to boost
Communication Infrastructure in India are:

 FDI cap in the telecom sector has been increased to 100% from
74%.
 In 2020, the government approved the Production Incentive Scheme
(P L I) for Large-scale Electronics Manufacturing.
 Department of Telecommunication launched ‘Tarang Sanchar’ – a
web portal sharing information on mobile towers and EMF Emission
Compliances.
 The government has approved a project at a cost of 20,000 crores
for creating a National Optical Fiber Network (N O F N) which
will provide broadband connectivity to 2.5 lakh gram panchayats for
various applications like e-Health, e-education, and e-governance.

Critical Infrastructure.
 The assets on which the broader economy is dependent are referred
to as critical infrastructure.
 Electricity generation, transmission, and distribution; gas
production, transport, and distribution; oil and oil product
production, transport, and distribution; telecommunication;
water supply, agriculture, food production and distribution,
public health (hospitals, ambulances), transportation
systems (fuel supply, railway network, airports, harbours,
inland shipping), financial services (banking, clearing), and
security services including police, military, etc., are included
in the critical infrastructure category.

Transport Infrastructure.
Road Transport.

 National Highways Network to be expanded by 25000 Km in 2022-

23.
 20000 Crore to be mobilized for National Highways Network
expansion.

Multimodal Logistics Parks.

 Contracts to be awarded through P P P mode in 2022-23 for
implementation of Multimodal Logistics Parks at four locations.
Railways.
 One Station One Product concept to help local businesses & supply
chains.
 2000 Km of railway network to be brought under Kavach, the
indigenous world class technology and capacity augmentation in
2022-23.
 400 new generation Vande Bharat Trains to be manufactured during
the next three years.
 100 P M Gati-Shakti Cargo terminals for multimodal logistics to be
developed during the next three years.

Parvatmala.
 National Ropeways Development Program, Parvatmala to be
taken up on P P P mode.
 Contracts to be awarded in 2022-23 for 8 ropeway projects of 60 Km
length.

Urban Infrastructure.
 Urbanization is an integral part of the process of economic growth.
As in most countries, India’s towns and cities make a major
contribution to the country’s economy. With less than 1/3 of
India’s people, its urban areas generate over 2/3 of the
country’s G D P and account for 90% of government
revenues.
 Hard infrastructure systems owned and operated by municipalities,
such as roadways, water distribution, and sewage, are referred to as
urban or municipal infrastructure. It may also contain certain soft
infrastructure assets, such as parks, public pools, and libraries.

Green Infrastructure.
 Green infrastructure is a concept that highlights the value of
natural environment.
 The life support service provided by a network of natural
ecosystems is emphasized. Examples include green belts, wildlife
sanctuaries, environmentally sensitive areas, tiger, lion, and
elephant reserves, bird sanctuaries, and the conservation of the
Western Ghats.
Concept Of Social Sector & Social Infrastructure.
 The Indian social sector is very important to the country’s growth
and development.
 It comprises multiple key components, all of which contribute to
general human development.
 The expenditure on these elements is a critical indicator of the
government’s commitment to India’s social sector.
 Positive externalities are associated with social infrastructure.
 Plays an important role in a country’s economic development and
wellbeing.
Social Sector:

 Health,
 Education,
 Water supply,
 Transportation,
 Agriculture and allied activities,
 Infrastructure,
 Irrigation,
 Management of natural resources such as water, forest, land,
energy,
 Welfare programmes and services, and so on.
 Investing in human capital including education, skill development,
training, and the provision of healthcare facilities increases labour
productivity and societal welfare.
 For inclusive development: Public investments in social
infrastructure such as education, health, housing, and connectivity
are critical.
At the time of independence:

 Literacy level: barely 17%,

 Life expectancy: 5 years at birth.
Present time:

 Literacy rate: 74.04%,

 Average life expectancy: 70 years.
E S G.
 E S G has gained a foothold among the stakeholders and is
considered a modern dimension of corporate social responsibility.
 ESG (Environmental, Social, and Governance) refers to the
three most essential factors which determine the long-term and
ethical impact of a business or company investment. The majority of
socially responsible investors use ESG criteria to screen
investments.

Health, Education, Family Welfare.

Health.
Health is the most crucial component of social infrastructure.
Healthcare has evolved to be one of India’s most important industries, both in
terms of income and employment. Hospitals, medical devices, clinical
trials, outsourcing, telemedicine, medical tourism, health insurance,
and medical equipment are all part of the industry.

 The necessity for a strong and resilient health infrastructure was

emphasised during the recent COVID-19 pandemic, which exposed
the weaknesses in social infrastructure across geographies.
According to the Economic Survey 2021-22,

 2021-22: the healthcare sector’s budgeted spending = 4.7 lakh

crore (roughly 2.1% of GDP and 6.6%of total Expenditure).

 Over time, both the government and private entities have increased
their investments in the healthcare industry.
 The 2017 National Health Policy aimed to boost
government health spending to 2.5% of GDP by 2025.
National Health Mission.

The Union Budget 2021-22 announced the Ayushman Bharat Health

Infrastructure Mission, a new Centrally Sponsored Scheme.

 Outlay of approximately Rs. 64,180 crores,

 Implemented over the next 5 years.
Purpose:

 To develop capacities of primary, secondary, and tertiary care

Health Systems,
 Strengthen existing national institutions,
 Establish new institutions to cater to the detection and cure of new
and emerging diseases.

Family Walfare.
The primary goal of the Family Welfare programme is to stabilise the
population and offer high-quality health services, including immunisation
of pregnant women and children. In 1952, India became the first country
in the world to implement a National Programme for Family Planning.

The following are the fundamental premises of the Family Welfare

Programme.

 Acceptance of Family Welfare services is voluntary;

 Family Welfare programme will provide: integrated Maternal
and Child Health (MCH) and family planning services, effective
information education & communication (IEC) to improve
awareness; easy and convenient access to Family Welfare services
at free of cost.
Trends in Social Service Sector Expenditure by General Government.

Note:

 Budget Estimate (BE) & Revised Estimate (RE).

 Social services include, education, sports, art and culture; medical
and public health, family welfare; water supply and sanitation;
housing; urban development; welfare of SCs, STs and OBCs, labour
and labour welfare; social security and welfare, nutrition, relief on
account of natural calamities etc.
 Expenditure on ‘Education’ pertains to expenditure on
‘Education, Sports, Arts and Culture’.
 Expenditure on ‘Health’ includes expenditure on ‘Medical and
Public Health’, ‘Family Welfare’ and ‘Water Supply and
Sanitation’.
 The ratios to Gross Domestic Product (GDP) at current market prices
are based on 2011-12 base.
 Projected GDP for BE 2021-2022 is Rs 222,87,379 crore.

Development Of Health Infrastructure.

 Health infrastructures are the essential services or social capital of a
country or region that support economic and social activity.
 In other words, these are the structures that contribute to
public health.
 Health infrastructure is an essential metric for assessing a country’s
healthcare policy and welfare system.
 Health disparities exist in India as a result of the uneven distribution
of health infrastructure between Indian states, which is primarily
characterised by:
(a) Institution,

(b)Knowledge, capacity,

(c)healthcare service.

 All these challenges are linked to economic growth, with a specific

emphasis on India.
 India has made significant progress in terms of health infrastructure
and mass population access to healthcare services.
 The infrastructure of a health system is a critical part of any
economy, because, it increases efficacy, safety, timeliness, patient-
centredness, access, and efficiency.
 Inadequacies: limit access to services and contribute to poor
quality of care and results, especially among underprivileged
communities.
 Challenges: Inadequate financial resources, poor facilities,
inadequate physical infrastructures, lack of efficient personnel and
materials planning, lack of good transportation facilities, and others.
 Basic area o health infrastructure,
 Skilled labour,
 Integrated electronic information systems,
 Public health agencies,
 Resources,
 Research.

Important Health Scheme.

 The PM-Ayushman Bharat Health Infrastructure Mission (PM-
ABHIM) : designed to improve primary, secondary, and tertiary care
health systems and to establish new institutions to address the
diagnosis and treatment of new and emerging illnesses.
 It has evolved to become the largest pan-India public health
infrastructure initiative since 2005.
 2021: Ayushman Bharat Digital Mission (ABDM), formerly
known as the National Digital Health Mission (NDHM), was launched
with the purpose of establishing the backbone built to support the
country’s integrated digital health infrastructure.
 In addition to the National Health Mission, the Union Budget 2021-22
announced the Ayushman Bharat Health Infrastructure Mission.