“Investment in infrastructure is essential for more rapid and inclusive economic growth.” Discuss in the light of India’s experience.

Sample Answer


Infrastructure sector is a key determinant of economic growth and development of a country. Countries across the world have used infrastructure as a weapon to escape from the vicious cycle of poverty and underdevelopment.


Infrastructure can address various constraints in achieving Inclusive growth:

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  • Local Multiplier effects: Capital expenditure multiplier is around 2.45 and hence it would revive both demand and supply leading to expeditious economic recovery and employment opportunities.
  • Double Farmers’ Income by integrating rural economy with rest of India. Such integration would reduce post- harvest losses, streamline agriculture supply chain, ensure success of E-NAM etc.
  • Reduce Logistics cost from 12-14% of India’ GDP to global benchmark of 8-10% and enhance the manufacturing competitiveness, boost exports and ensure Aatma Nirbhar Bharat.
  • Provide multi-modal connectivity to Economic Zones like MSME clusters, SEZs etc.
  • Rural Transformation through greater integration of rural economy with urban economy. For example, 10% increase in broadband penetration can lead to 1% increase in the GDP.

Other benefits: 

  • Employment creation, environmental conservation, disaster resilient infrastructure.

However, despite these benefits, Infrastructure sector faces number of constraints:

  • Time and Cost overruns: One out of every five infrastructure projects have a delay of over five years leading to cost escalation of Rs 4.5 lakh crores in 2019-20 (MoSPI Report)
  • Lack of Coordination between different Ministries/ Departments.


  • Asset-Liability Mismatch for Banks and NBFCs
  • Underdeveloped Corporate Bond Market
  • Poor implementation of PPP projects as identified by Vijay Kelkar Committee.


Infrastructure lies at the core of India’s ability to realise 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 of Aatma Nirbhar Bharat.

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