2.

Goals of Infrastructure
Planning
Dr. Mona N. Shah
Ph.D., MBA., DHL

INFRASTRUCTURE IN THE INDIAN ECONOMY

Agriculture Development and Infrastructure:
The prosperity of a country depends directly upon the
development of agriculture and industry. Agriculture production,
however requires irrigation, power, credit, transport facilities
etc.

Industrial Development and Infrastructure:

Industrial production requires not only machinery and
equipment but also skilled manpower, management, energy,
transport services which include railways, roads

Services Development and Infrastructure:

Banking and insurance facilities, marketing facilities, and
shipping communication facilities etc.
All the above facilities and services constitute collectively the
infrastructure of an economy and the development and
expansion of these facilities are an essential pre-condition for
increasing agricultural and industrial production in a country.

(Recap from PPT 1 and 1a.)

Infrastructural facilities often referred to as economic and social
overheads and are classified as Economic and Social Infrastructure
categories:
a. Irrigation, including flood control and command area development.
b. Energy: Coal, Electricity, Oil and Non-conventional sources
c. Transport: Railways, roads, shipping and civil aviation

Goals of Infrastructure Planning

Infrastructure is an enabler for development
therefore
a. Citizens, men and women equally, have the right to an
adequate means of livelihood
b. That the ownership and control of the resources of the
community are so distributed, as best to sub-serve the
common good
c. That the operation of the economic system does not result
in the concentration of wealth and means of production
. Long term objectives of Planning
a. To increase production to the maximum possible extent so
as to achieve higher level of national per capita income
b. To achieve full employment
c. To reduce inequalities of income and wealth
d. To set up a socialist society based on equality

ource: Constitution of India Directive Principles of State Policy, Dutt, Sundaram,-Indian Economy

Models for Growth and

Development in India
Mahalnobis Model of Growth (Nehru)
Salient Features
1. Focussed emphasis on heavy industries that
includes coal, power, iron and steel, heavy
machinery, heavy chemicals and heavy
engineering
2. Huge investments for rapid industrialisation on
heavy, basic and machine- building industries

Nehru vs Gandhi Model of Growth

Salient Features
3. Primacy to industry versus agriculture
4. Primacy to heavy industry versus cottage and
small-scale industries

Liberalisation Privatisation Globalisation (LPG)

1. Deregulation of public sector industries in favour of private sector
2. Removal of licenses for setting up of industries by the private sector
3. Abolition of threshold limit of assets of MRTP companies
4. FDI approvals for upto 51 per cent in high priority areas
5. Chronically sick public sector enterprises came up for rehabilitation
6. Greater autonomy to public sector units and more professionalism introduced
7. Encouragement to exports, reduction in import duties and other barriers were
brought about
8. Bigger role for private sector and reduction of role of the State
9. More market-driven pattern of development

PURA Neo- Gandhian Approach to Development

10.
Emphasis on removal of poverty by providing urban amenities to the rural areas
11.
Agriculture and food processing
12.
Reliable and quality electric power
13.
Development of strategic sectors (development of nuclear, space, defence
technology)
14.
Four important connectivities physical, electronic, knowledge and
economic

Infrastructure Development Five Year

Plans
Objectives of the First Five Year Plan (1951 to 1956): GDP
target for growth 2.1 %
The primary aim of the First Five Year Plan was to improve living
standards of the people of India. The total outlay of the First Five
Year Plan was worth Rs.2,069 crore. This amount was assigned to
different sectors which included:
1. Industrial sector
2. Energy, Irrigation
3. Transport, Communications
4. Land rehabilitation
5. Social services
6. Development of agriculture and community
. Some important events that took place during the tenure
of the First Five Year Plan :
The following Irrigation projects were started during that period:
1. Mettur Dam
2. Hirakud Dam
3. Bhakra Dam
4. Improvement in posts and telegraphs, railway services, road
tracks, civil aviation.

Objectives of the Second Five Year Plan (1956 to 1961):

Heavy industries given more importance in the Second Five Year Plan . This
was done primarily to develop the public sector. This was aimed with a view
to achieve maximum returns on a long term basis.
1. 5 steel plants including the ones in Durgapur, Jamshedpur as well as Bhilai
were set up as per the Second Five Year Plan .
2. Hydroelectric power plants were formed during the tenure of the Second
Five Year Plan .
3. There was considerable increase in production of coal.
4. The North eastern part of the country, witnessed increase in the number of
railway tracks.

Objectives of the Third Five Year Plan (1961 to 1966):

Increase in national income of over 5 per cent per annum, and sustain it
in subsequent plans through the following measures
5. To achieve self-sufficiency in foodgrains and increase agricultural
production to meet the requirements of industry and exports;
6. To expand basic industries like steel, chemicals industries, fuel and power
and establish machine-building capacity, so that the requirements of further
industrialisation can be met within a period of ten years or so mainly from
the country's own resources;
7. To utilise to the fullest possible extent, the manpower resources of the
country and to ensure a substantial expansion in employment
opportunities

4. To establish progressively greater equality of opportunity and to bring

about reduction in disparities in income and wealth and a more
even distribution of economic power.
5. Programmes for industrial development were drawn up from the point of
view of the needs and priorities of the economy as a whole, the
public and the private sectors being considered together.

Dominant role of public sector.

Continue to build up small industries as a vital segment in this
industrial structure by promoting greater integration between large scale
and small scale industries, spreading the benefits of industrialisation to
small towns and rural areas and introducing improved techniques in the
traditional rural industries.
Objectives of TheFourth Five Year Plan of India (1969 to 1974):
1.

India had to reform and restructure its expenditure agenda, following

recession, famine and drought, India did not pay much heed to long
term goals. It started taking measures to overcome the crisis.

2.

Food grains production increased to bring about self sufficiency in

production.
The need for foreign reserves was felt. This facilitated growth in
exports. Import substitution drew considerable attention. All these
activities widened the industrial platform.

3.

Objectives of TheFifth Five Year Plan India (1974 to

1979):
Emphasis on poverty reduction
1. To reduce social, regional, and economic disparities for developmental planning
2. To enhance agricultural productivity
3. To initiate land reforms
4. To check rural and urban unemployment
5. To emphasize on household industries like carpet-weaving, handlooms,
sericulture, and handicrafts
6. To encourage self-employment through a well integrated local planning
7. To encourage import substitution in areas like industrial machinery, chemicals,
paper, iron and steel and non-ferrous metals
8. To capture the markets with locational advantages
9. To initiate appropriate use of fiscal, credit and production support policies in
the cottage industry sector
10.To develop labour intensive technological improvements

Objectives of The Sixth Five Plan of India

(1980 to

1985):

1.

2.
3.
4.
5.

6.

7.
8.
9.

A significant step up in the rate of growth of the economy, the

promotion of efficiency in the use of resources and
improved productivity;
Strengthening the modernisation of industries to achieve
economic and technological self-reliance;
A progressive reduction in the incidence of poverty and
unemployment
A speedy development of indigenous sources of energy, with
proper emphasis on conservation and efficiency in energy use;
Improving the quality of life of the people in general with
special reference to the economically and socially handicapped
population, through a Minimum Needs Programme for balanced
nation-wide growth
Strengthening the redistributive bias of public policies and
services in favour of the poor contributing to a reduction,
in inequalities of income and wealth;
A progressive reduction in regional inequalities in
development and diffusion of technological benefits;
Promotion policies for controlling the growth of population
through voluntary acceptance of the small family norm;
Bringing about harmony between the short and the Iong term

Objectives of The Seventh Five Year Plan (1985 to

1990):
The main objective of the Seventh Five Year Plan was to generate
more scope of employment and increase productivity in
terms of food.
The other important aspects which constituted the Seventh Five Year
Plan were
1. Reducing the level of poverty.
2. Education of girls.
3. Enhancing the telecommunication industry.
4. Development of agriculture.
5. Introduction and implementation of modern technology.
6. Help small and large farmers in increasing productivity.
7. Strengthen the economy of the country.
8. Development of better transport facilities including inland
waterways,
9. Product pipelines, civil aviation and coastal shipping.
10. Emergence of Informatics.

Objectives of The Eighth Five Year Plan (1992 to 1997):

1.

To prioritize the specific sectors which required immediate

investment
2. To generate full scale employment
3. To promote social welfare measures like improved healthcare,
sanitation, communication and provision for extensive education
facilities at all levels
4. To check the increasing population growth by creating mass
awareness programs
5. To encourage growth and diversification of agriculture
6. To achieve self-reliance in food and produce surpluses for
increase in exports
7. To strengthen the infrastructural facilities like energy, power,
irrigation
8. To increase the technical capacities for developed science
and technology
9. To modernize Indian economy and build up a competitive
efficiency in order to participate in the global developments
10. To place greater emphasis on role of private initiative in the
development of the industrial sector

Objectives of The Ninth Five Year Plan (1997 to 2002):

1. To prioritize agricultural sector and emphasize on rural development
2. To generate adequate employment opportunities and promote poverty
reduction
3. To stabilise the prices in order to accelerate the growth rate of economy
4. To ensure food and nutritional security
5. To have a control on population increase
6. To create a liberal market for increase in private investment

Objectives of The Tenth Five Year Plan (2002 to 2007):

Objective of achieving 8 per cent per annum growth over the plan period. First time
Monitorable Targets were set for the achievement of the objectives. The Tenth Plan
also aimed at enhancement of human well being and identifies the following specific
and monitorable targets for this purpose:
1. Reduction of poverty ratio by 5 percent by 2007 and by 15 percent by 2012.
2. Providing gainful and high-quality employment at least to the addition to the
labour- force over the tenth plan period.
3. All children in school by 2003; all children to complete 5 years of schooling by
2007;
4. Reduction in gender gaps in literacy and wage rates by at least 50 per cent by
2007;

5. Reduction in the decadal rate of population growth between 2001 and

2011 to 16.2 percent;
6. Increase in literacy rate to 75 per cent within the plan period;
7. Reduction of infant mortality rate to 45 per 1000 live births by 2007
and to 28 by 2012;
8. Reduction of maternal mortality ratio to 2 per 1000 live births by 2007
and to 1 by 2012;
9. Increase in forest and tree cover to 25 per cent to 2007 and 33 per
cent by 2012;
10. All villages to have sustained access to potable drinking water
within the plan period;
11. Cleaning of all major polluted rivers by 2007 and other notified
stretches by 2012.

Objective of 8 percent was indeed a daunting task as the medium term

performance of the economy over the earlier past years had not exceeded

Objectives of The Eleventh Five Year Plan (2007 to 2012):

Income & Poverty
1.Accelerate GDP growth from 8% to 10% and then maintain at 10% in the 12th Plan in order to
double per capita income by 2016-17
2. Increase agricultural GDP growth rate to 4% per year to ensure a broader spread of benefits
3. Create 70 million new work opportunities.
4. Reduce educated unemployment to below 5%.
5.Raise real wage rate of unskilled workers by 20 percent.
6.Reduce poverty by 10 percent and improve purchasing power of BPL families
Education
7.Reduce dropout rates of children from elementary school from 52.2% in 2003-04 to 20% by
2011-12
8. Develop minimum standards of educational attainment in elementary school, and by regular
testing monitor effectiveness of education to ensure quality
9.Increase literacy rate for persons of age 7 years or above to 85%
10.
Lower gender gap in literacy to 10 percentage point
11.
Increase the percentage of each cohort going to higher education from the present 10% to
15% by the end of the plan
Health
12.
Reduce infant mortality rate to 28 and maternal mortality ratio to 1 per 1000 live births
13.Reduce Total Fertility Rate to 2.1
14.
Provide clean drinking water for all by 2009 and ensure that there are no slip-backs
15.
Reduce malnutrition among children of age group 0-3 to half its present level
16.
Reduce anaemia among women and girls by 50% by the end of the plan

Women and Children

1. Raise the sex ratio for age group 0-6 to 935 by 2011-12 and to 950 by 2016-17
2. Ensure that at least 33 percent of the direct and indirect beneficiaries of all
government schemes are women and girl children
3. Ensure that all children enjoy a safe childhood, without any compulsion to work

Infrastructure
4. Ensure electricity connections to all villages and BPL households by 2009 and round-theclock power.
5. Ensure all-weather road connection to all habitation with population 1000 and above (500
in hilly and tribal areas) by 2009, and ensure coverage of all significant habitation by 2015
6. Connect every village by telephone by November 2007 and provide broadband
connectivity to all villages by 2012
7. Provide homestead sites to all by 2012 and step up the pace of house construction for
rural poor to cover all the poor by 2016-17

Environment
8. Increase forest and tree cover by 5 percent.
9. Attain WHO standards of air quality in all major cities by 2011-12.
10.Treat all urban waste water by 2011-12 to clean river waters.
11.Increase energy efficiency by 20 percentby 2016-17.

Objectives of The Twelfth Five Year Plan

(2012 to 2017):
1.
2.
3.
4.
5.
6.
7.
8.
9.

To raise the standard of living

Higher level of employment
Growth with social justice
Increasing industrial output
To remove bottlenecks in agriculture, manufacturing
industry
Reduction of inequality in income
Modernization
9% of GDP growth is target
Growth of economic sector through PPP model

Human Development
Elucidating the concept of human development, UNDP Human
Development Report (1997) describes it as "the process of widening
people's
choices
and
the
level
of
well-being they achieve are at the core of the notion of human
development.
Regardless of the level of development, 3 three essential choices for
people are
a) to lead a long and healthy life,
b) to acquire knowledge and
c) to have access to the resources needed for a decent standard of
living.
d) Other choices range from political, economic and social freedom to
opportunities for being creative and productive and enjoying selfrespect and guaranteed human rights".
Further the Report states that "Income clearly is only one option that
people would like to have, though an important one. But it is not the sum
total of their lives. Income is also a means, with human development the
end.

TheHuman Development Index(HDI) is a composite statistic of life

expectancy, education, and incomeindicesused to rank countries into
four tiers ofhuman development. In the 2010 Human Development
Report a furtherInequality-adjusted Human Development Index(IHDI)
was introduced.
The 2013 report focuses on the "rise of the south", mapping the shift in
global dynamics from the traditional power base in the west to newer
emerging countries.
Besides the emerging economies of Brazil, Russia, India, China, and
South Africa (BRICS), the report also acknowledges developing nations
such as Turkey, Mexico, Thailand and Indonesia as playing a larger role
on the global stage.
It estimates that by 2020, the combined economic output of the three
leading developing countries India, Brazil and China will surpass
theExercise:
aggregateDiscuss
production
Canada, France,
Germany, Goals
Italy, the
United
theof
Millennium
Development
and
Kingdom
and the
United States.
the Human
Development
Index of a country with respect to
infrastructure creation.
It underlines south-south cooperation as the key factor in boosting such
development.

Snapshot of Countries by HDI Ranking

Human Development Index and its components

HDI
rank
Very high human development
1Norway
3United States
5Germany
10Japan
11Canada
12Korea (Republic of)
26United Kingdom
High human development
55Russian Federation
57Saudi Arabia
61Mexico
64Malaysia
76Iran (Islamic Republic of)
85Brazil
92Sri Lanka
Medium human development

101China
102Turkmenistan
103Thailand
104Maldives
112Egypt
114Philippines
121Indonesia
121South Africa
127Viet Nam

136India
140Bhutan
Low human development
146Bangladesh
146Pakistan
153Nigeria

Human
Development
Index (HDI)

Life expectancy
at birth

Mean years of
schooling

Expected years of
schooling

Gross national
income (GNI) per
capita

Value

(years)

(years)

(years)

(2005 PPP $)

2012

2012

2010

0.955
0.937
0.920
0.912
0.911
0.909
0.875

81.3
78.7
80.6
83.6
81.1
80.7
80.3

12.6
13.3
12.2
11.6
12.3
11.6
9.4

0.788
0.782
0.775
0.769
0.742
0.730
0.715

69.1
74.1
77.1
74.5
73.2
73.8
75.1

11.7
7.8
8.5
9.5
7.8
7.2
9.3

0.699
0.698
0.690
0.688
0.662
0.654
0.629
0.629
0.617
0.554
0.538

73.7
65.2
74.3
77.1
73.5
69.0
69.8
53.4
75.4
65.8
67.6

7.5
9.9
6.6
5.8
6.4
8.9
5.8
8.5
5.5
4.4
2.3

0.515
0.515
0.471

69.2
65.7
52.3

4.8
4.9
5.2

2011

17.5
16.8
16.4
15.3
15.1
17.2
16.4

14.3
14.3
13.7
12.6
14.4
14.2
12.7
11.7
12.6
12.3
12.5
12.1
11.7
12.9
13.1
11.9
10.7
12.4
8.1
7.3
9.0

GNI per capita

rank minus HDI
rank

Nonincome HDI
Value

2012

2012

2012

48,688
43,480
35,431
32,545
35,369
28,231
32,538

4
6
10
11
5
15
-5

0.977
0.958
0.948
0.942
0.934
0.949
0.886

14,461
22,616
12,947
13,676
10,695
10,152
5,170

0
-21
4
-7
-1
-8
18

0.816
0.774
0.805
0.791
0.769
0.755
0.792

7,945
7,782
7,722
7,478
5,401
3,752
4,154
9,594
2,970
3,285
5,246

-11
-10
-10
-9
-6
11
-3
-42
9
-3
-31

0.728
0.727
0.715
0.715
0.702
0.724
0.672
0.608
0.686
0.575
0.516

1,785
2,566
2,102

9
-9
-6

0.567
0.534
0.482

 End