Plus One Economics Chapter 8
Plus One Economics Chapter 8

Plus One Economics Chapter 8

Chapter 8:-

Infrastructure: Economic and Social Infrastructure.

Plus One Economics Chapter 8


For a nation’s growth and development it needs some basic facilities like power, water, transportation, communication, etc. These basic facilities are called infrastructure.

Infrastructure Definition

Infrastructure often refers to the equipment and structures required by the by a country or region. Most economic activities in agricultural, industrial or service sectors of the economy require basic facilities like power, water, transportation, communication, etc. These facilities are provided by permanent installations like railway lines, roads, dams, power stations, ports, satellites and so on. Skilled manpower is provided by educational institutions like schools and colleges, and health inputs are provided by hospitals. These institutions that provide the basic facilities constitute infrastructure.

Economic and Social Infrastructure

Infrastructure can be divided into two:


  • Economic infrastructure.

  • Social infrastructure.

Table 8.1 Infrastructure

Economic Infrastructure Social Infrastructure
Transportation : Road, Railways, Port and Airports. Education : Schools and Colleges
Dams Health: Hospitals, Sanitation facilities, Drinking water facilities.
Electricity : Power stations. Housing
Communication Water supply
Insurance companies
Other financial institutions

Relevance of Infrastructure

Infrastructure contributes to economic growth and development in the following ways:

  • Attracts investment that facilitates economic growth and development.

  • It increases productivity.

  • It raises the quality of life of people.

  • Improvement in social infrastructure lowers morbidity and raises life expectancy.

State of Infrastructure in India

India has made progress in railways, roads, airways, power generation, communication, port facilities, etc. In social infrastructure like literacy, education, health care and housing also progress has been achieved. But there are two major deficiencies:

  • Inadequate infrastructure development for a fast growing economy like India.

  • Poor rural infrastructure.

    2001 census figures reflect the backwardness of rural infrastructure.

  • Only 56 per cent of rural households have electricity.

  • 43 per cent rural households still use kerosene.

  • 90 per cent of rural households use bio-fuels (firewood, dry dung, etc.) for cooking.

  • 76 per cent of rural households depend on open sources like wells, tanks, ponds, lakes, canals, rivers, etc. for drinking water.

  • Tap water availability is limited to only 24 per cent.

  • Improved sanitation facilities in rural areas was only 20 per cent.

The following table shows India’s poor spending on infrastructure and inadequate infrastructure development.

Table 8.2 Infrastructure in India and other countries

Country Investment in infrastructure (% of GDP) (2013) Access to safe drinking water (%) (2012) Access to improved sanitation (%) (2012) Mobile users (1000 people) (2013) Power generation {KW 1000) (2022)
China 49 92 65 89 4715
India 30 84 35 71 1052
South Korea 29 98 100 111 520
Pakisthan 14 91 47 70 95
Indonesia 34 84 59 122 182
Source: World Development Report

India is now the fastest growing market for mobile phones. Privatisation in this area has led to growth of mobile connections. Presently Indian telecom companies are giving more than 7 million mobile connections a month. But, this growth is not seen in areas like power generation, drinking water, sanitation, etc.

Investment in infrastructure as a percentage of GDP has to be increased, Government investment alone is inadequate (only 5 per cent). The private sector also has to be involved in a big way. This is called PPP (Public Private Participation). Many successful PPP projects have come up in infrastructure all over the country. The CIAL (Cochin InterNational Airport Ltd.) is a good example of PPP in infrastructure.

Two major areas of infrastructure that pose a serious challenge in India are energy and health.


Economic activity requires energy. In olden days muscle power of human beings and power of animals like bullocks, camels, horses and donkeys were important sources of energy. Later, energy generated by sunshine, wind, falling water, streams, etc., was harnessed. In the modern world, important sources of energy are coal, petroleum products, natural gas and electricity.

Sources of Energy

Energy sources can be broadly classified into two:

  • Commercial energy

  • Non-commercial energy

Commercial energy

Commercial energy is used for commercial purposes. Coal, petroleum products, natural gas and electricity are energy resources used for commercial activities.

Non-commercial energy

Fuel wood, agricultural waste and dried animal dung are non-commercial energy resources. Non-commercial energy is used for non-commercial activities like cooking.

An important point of distinction between commercial energy and non-commercial, energy is that while the former is exhaustible with the exception of hydro-power (non-renewable), the latter is renewable.

Non-Conventional Energy Sources

Energy can also be classified into conventional and non-conventional energy. Coal, petroleum and electricity form conventional energy. They are largely non-renewable and cause pollution. There are no such-problems in non-conventional energy. Energy from the sun, wind, tides, waves, bio mass, etc., is non-conventional energy. It is renewable and nearly pollution free. Unfortunately, the technology to produce non-conventional energy on a large scale is yet to be developed.

Table 8.3 Difference between Conventional and Non-conventional Energy Sources
Conventional Non-conventional
They are largely non-renewable They are renewable
Cause pollution Nearly pollution free
Sources are limited Abundant sources
Examples: Coal, petroleum and electricity Examples: Solar energy, wind energy, tidal energy, biomass, etc.

Consumption Pattern of Commercial Energy

Presently, the pattern of energy consumption in India is as follows:

Commercial energy – 74 per cent

Non-commercial energy – 26 per cent

Commercial energy consumption:

Coal – 54 per cent

Petroleum – 33 per cent

Natural gas – 10 per cent

Hydro energy – 3 percent

During 1953-54 period, maximum power consumption occurred in the transport sector. Gradually it came down, and the industrial sector began to consume more energy. Rapid economic growth automatically calls for proportional increase in power consumption.

Trends in Sectoral Share of Commercial Energy Consumption

Agriculture, industry, services and households need energy. Presently, the share of these different sectors in energy consumption is as follows:

Table 8.4 Trends in Sectoral Share of Commercial Energy Consumption
Sector 1953-54 1970-71 1990-91 2017-18
Households 10 12 12 24
Agriculture 01 03 08 18
Industries 40 50 45 42
Transport 44 22 28 1
Others 05 07 13 15
Total 100 100 100 100

Power / Electricity

Electricity is an integral part of our life today. Important sources of electricity are hydro, thermal and nuclear plants. Electricity is generated by utilities like Electricity Boards, Corporations or Companies in the private sector. Many companies have their captive power generation plants called non-utilities.

Primary energy resources are coal, hydro carbons, hydro energy, nuclear energy, renewable energy, etc. Electricity is a secondary form of energy produced from primary energy resources.

Power Generation in India

The sources of power generation in India are given below: (2012-13 figures)

Table 8.5
Sources of Energy Percent of total
Thermal 70
Hydro and wind power 16
Nuclear (Atomic) 2
Others 12

Thermal power is the largest source of energy in India. 70 per cent of the electric energy generated is with thermal power. Coal, petroleum and natural gas are essential for thermal electricity generation. Hydro, wind and nuclear energies are less polluting. However, they account for only 30 per cent of total energy generated.

National Thermal Power Corporation (NTPC)

Established in 1975, NTPC is the largest electric energy generating company in India. Rajiv Gandhi Power Station in Kayamkulam, Kerala, is one of NTPC’s power stations. NTPC has a total of 27 thermal power plants.

Rajiv Gandhi Akshaya Energy Day

August 20 — the birthday of late Prime Minister Sri. Rajiv Gandhi is celebrated as Rajiv Gandhi Akshaya Energy Day.

Some Challenges in the Power Sector

India’s power sector faces many challenges today:

  • Our power generation is not sufficient to feed the fast economic growth rate.
  • Our installed capacity for power generation is low. Moreover, the installed capacity is under utilised.
  • State Electricity Boards (SEBs) are inefficient with accumulated losses exceeding ₹ 20,000 crore.
  • Distribution and transmission losses, wrong pricing of electricity, free supply of electricity to farmers, etc. Subsidies and power theft are huge.
  • There are frequent power cuts and high power tariffs.
  • Thermal power plants face shortage of coal.
  • Low participation of private sector in power generation.

Measures to meet Power Crisis

If India is to achieve sustained high growth rate, we have to achieve self sufficiency in power through:

  • Increased public investment
  • Encouraging PPP
  • Encouraging the use of renew-able energy like hydro energy, wind energy, etc.
  • Promoting energy conservation through use of CFL lamps, LED, etc.
  • Nuclear energy generation through international cooperation.
  • Reduction of distribution and transmission loss by SEBs.
  • Effective measures to check power theft.
  • Creating awareness among the people about the importance of electric energy.


Health is a yardstick of one’s well being. It is the holistic process related to overall growth and development of a nation.

A healthy population is the most productive resource. Economists judge health conditions of the people of a country by looking at the following indicators:

  • Infant mortality.
  • Maternal mortality.
  • Life expectancy.
  • Nutritional levels.
  • Incidence of diseases.
  • Health infrastructure.

As a country develops, its infant mortality, maternal mortality and incidence of diseases decline. At the same time, life expectancy, nutritional levels and health infrastructure improve.

Health Infrastructure

Development of health infrastructure ensures a country with healthy manpower for the production of goods and services. It is the responsibility of the government to ensure the right to healthy living.

Health infrastructure consists of hospitals, doctors, nurses and paramedical professionals, and beds, medical equipment and adequate medicines. It is very important that health infrastructure should be accessible to all people.

State of Health Infrastructure

(Public Health Infrastructure in India)

Government has the constitutional obligation to guide and regulate all health related issues like medical education, adulteration of food, drugs and poison, medical profession, etc. The Central Government frames various policies and plans through the Central Council of Health and Family Welfare. It collects data and provides financial and technical assistance to state governments and union territories. Central government insists that the states should take up the implementation of various health programmes in the country.

India has built a vast health infrastructure at different levels.

  • At the village level, Primary Health Centres (PHCs) have been set up.
  • We have a large number of hospitals run by voluntary agencies and private enterprises. These hospitals engage professionals and para-medical staff trained in various medical institutions.
  • Since independence, considerable expansion in the physical provision of health services took place. During the 1951 – 2018 period, government hospitals and dispensaries taken together increased from 9300 to 53800 and hospital beds from 1.2 to 7.1 lakh.
  • Nursing personnel increased from 18,000 to 30 lakh.
  • Allopathic doctors 62,000 in number increased to 11.5 lakh.

Improvement of health infrastructure led to eradication of small pox, guinea worms, etc.

Table 8.6 Public Health Infrastructure in India (1951-2018)
Item 1951 1981 2000 2018
Hospitals (Govt.) 10 12 12 24
Beds (Govt) 01 03 08 18
Dispensaries 40 50 45 42
CHCs 44 22 28 1
PHCs 05 07 13 15
Sub-centres 100 100 100 100
Source: Ministry of Health, Government of India

Health System in India

India’s health infrastructure for health care consists of a three-tier system. These are:

  • Primary health care

  • Secondary health care

  • Tertiary health care

1) Primary Health Care

  • Education about identifying, preventing and controlling diseases.
  • Promotion.of nutrition and issues relating to water and sanitation.
  • Maternal and child health care
  • Immunisation against certain diseases
  • Provision of essential drugs

India has a three-tier system to provide primary health care. This is as follows:

  • Sub centres catering to a population of about 5,000
  • Primary Health Centres (PHCs) at block level
  • Community Health Centers (CHCs) at district level

2) Secondary Health Care

When patients need advanced health care, they are referred to secondary or tertiary hospitals, which have facilities for X-ray, scanning, ECG, surgery, etc. Secondary health care facilities are available in district headquarters.

3) Tertiary Health Care

These institutions are those at the top of health care and medical education and research. They provide medical care, impart medical education and involve in advanced medical research. All India Institute of Medical Sciences (AIIMS), National Institute of Mental Health and Neuro Sciences (NIMHANS), etc. are examples.

Private Sector Health Infrastructure

  • More than 70 per cent of the hospitals are in the private sector. They control two-fifth of the beds available in the hospitals.
  • Nearly 60 per cent of dispensaries are in the private sector.
  • Private hospitals provide health-care for 80 per cent of outpatients and 46 per cent of inpatients.

Private sector has also played a significant role in the following fields:

  • Medical education and training.
  • Medical technology and diagnostics.
  • Manufacture and sale of pharmaceuticals.
  • Hospital construction and the provision of medical services.

Medical Tourism: A Great Opportunity

Medical Tourism

Medical tourism is tourism for medical treatment. Formerly, Indians were going abroad for treatment. Now, the reverse is happening. Foreigners are coming to India for treatment because:

  • India has highly advanced medical infrastructure for treatment.
  • Availability of highly qualified specialists.
  • A well developed pharmaceutical industry.
  • Cost of medicines in India is one of the lowest in the world.
  • Expenditure on medical treatment is very low compared to the expenditure in developed countries.

The above factors make India an attractive destination for medical tourism. 2,01,000 foreigners came to India for medical treatment in 2016.

Community and Non-profit Organisations in Healthcare

Community participation is important for a good healthcare system.The idea behind this is to train people and make them involve in primary healthcare. This method is already being experimented in some parts of the country.

  • SEWA in Ahmedabad and ACCORD in Nilgiris are goods examples of NGOs working in India.
  • Trade unions also came forward and built alternative healthcare services for their members and non-members as well from nearby villages. A notable and pioneering initiative has been Shahid hospital, built in 1983 and sustained by the workers of CMSS (Chattisgarh Mines Shramik Sangh) in Durg, Madhya Pradesh.
  • Rural organisations also take alternative healthcare initiatives. One typical example in this direction is in Thane, Maharashtra. Here, a tribal people’s organisation called Kashtakari Sangathan trains women health workers at the village level to treat simple illnesses at minimum cost.

Indian System of Medicine (ISM)

Indian Systems of Medicine (ISM) comprises six systems —

Indian System of Medicine (ISM)

  • Ayurveda.
  • Unani.
  • Naturopathy.
  • Yoga.
  • Siddha.
  • Homeopathy.


At present there are 4095 AYUSH hospitals and 27951 dispensaries and as many as 8 lakh registered practitioners in our country. India is famous for these indigenous systems of medicine. An important advantage of ISM is that it is less expensive. Also, side effects of treatment are less compared to allopathy. ISM has huge potential and is capable of solving a large part of our healthcare problems because they are safe and effective. ISM in general and Ayurvedic treatment in particular are emerging as a major tourist attraction and foreign exchange earner.

Indicators of Health and Health Infrastructure: A Critical Appraisal

Health status of a country is assessed through health indicators | like infant mortality, maternal mortality, life expectancy, nutrition and incidence of diseases. India spends only 3.7% of the total GDP on health. This is very low and both for under developed and developing countries.

  • India has about one-fifth of the world’s population but it bears a 20 per cent of the Global Burden of Diseases (GBD). GBD is an indicator used by experts to measure the number of premature death of people due to a particular disease as well as the number of years spent by them in a state of disability due to the disease. WHO takes into account Disability Adjusted Life Year (DALY) to measure the extent of GBD.
  • Nearly two-thirds of GBD, now known as Total Burden of Disease, was caused by non-communicable diseases connected with heart, respiratory system — lungs, kidney, obesity and life style. Diarrhoea, lower respiratory system, and other infectious diseases caused about one-sixth of total deaths in India.
  • Out of 4.1 million early deaths in the world, nearly 1.1 million deaths were from India alone. The proportion of deaths accounts for 8 per cent (cancer), 11 per cent (injuries) is alarming.
  • Around 5 lakh children die of water-borne diseases and 2.2 lakh die due to malnutrition.
  • Less than 20 per cent of the population utilises public health facilities.
  • Only 38 per cent of the PHCs have enough doctors and only 30 per cent of the PHCs have sufficient stock of medicines.

Some of the health indicators in India in comparison to other countries are given in the following table:

Table 8.7 Health indicators in India in comparison to other countries, 2016 – 18
Indicators India China USA Sri Lanka
Infant mortality rate

(per 1,000 live births) (2018)

30 7.4 5.6 6.4
Under 5 mortality

(per 1,000 live births) (2016)

37 8.6 6.5 7.4
Birth by skilled attendants (2016) 81 81 99 99
Infants immunised (2016) 89 89 94 99
Health expenditure

(as % of GDP) (2016)

3.7 5.7 17 3.9
Out of pocket expenditure

(as % of current health expenditure) (2016)

6.5 36 11.1 50
Source: World Development Indicators 2019

Urban-Rural and Rich-Poor Divide

Indian society is characterised by big inequalities between rich and poor and urban and rural people. These disparities can be seen in health care also. ;

  • 70 per cent of India’s population live in rural areas. But, only 20 per cent of hospitals are found in rural areas.
  • Rural India with 70 per cent of population has only 50 per cent of dispensaries.
  • Rural areas have only 11 per cent of hospital beds while urban areas have 89 per cent.
  • PHCs in rural areas do not have facilities like X ray, blood testing, etc.
  • Rural health care does not offer specialised medical care.
  • There is huge shortage of doctors in rural areas. Majority of doctors do not prefer to work in rural areas.
  • Rural people with low income are forced to spend a big part of their income on medical treatment.
  • Around 20 per cent of the poorest Indians living in both urban and rural areas, spend 12 per cent of their income on healthcare. Out of which rich spend only 2 per cent.
  • States like Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh lag behind in healthcare facilities.
  • Since government run hospitals do not provide sufficient facilities, the poor are driven to private hospitals which put them in debt forever.

The phenomenal growth of medical infrastructure in India due to private investment has improved the availability of healthcare facilities. But rural and _ poor population do not have access to these facilities since they are expensive. Government has to play an important role in solving this problem. Government’s health expenditure as a percentage of total expenditure is very low in India. Therefore, public health expenditure should be increased substantially.

Women’s Health

Women Health

Women constitute half the population in India. But, unfortunately, this half of the population are not getting a fair share of what is due to them. There are big gender disparities in education, health and employment. For example:

  • The reduction in child sex ratio from 927 in 2001 to 919 in 2011 reveals the growing incidence of female foeticide.
  • Five per cent of girls between the age group of 15 – 19 are not only married but have already borne children at least once.
  • More than 50 per cent of married women in the age group of 15-49 suffer from anaemia and nutritional problems caused by iron deficiency. This has not declined since 2005.
  • Studies show that premature deaths due to neonatal disorders top in both the years 2007 and 2017.


Infrastructure development is a must for economic growth and development. Since independence, India suffers from deficiencies in infrastructure. Gender disparities in education, health and urban rural divide are examples. Present infrastructural facilities are inadequate. Since the Government alone cannot provide all the required infrastructure, PPP can substantially contribute.

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