Economic
Infrastructure And Trade
It refers to
activities, facilities & the services which support operators &
development of other sector in the economy.
Types of Infrastructure:
a) Social
Infrastructure:
It is concerned with supply of such services to meet the basic needs of society
such as education, training, health, sanitation, etc.
b) Physical
Infrastructure:
Are directly concerned with the needs of production sectors, such as
agriculture, industry, etc.
Importance of Infrastructure:
1. Infrastructure facilities the smooth
functioning of an economy. Without which the economy cannot function smoothly.
2. The development of agriculture to a
greater extent, adequate expansion & development of irrigation, power,
marketing, training, research & development & other facilities.
3. Industrial production requires not
only machinery & equipment, but also social & economic infrastructures.
Like energy, skilled man power, banking, marketing, insurance, management, etc.
4. Infrastructure development is a
precondition for increasing investment with a sound infrastructural base
capital investment can be attracted.
5. It generates employment opportunities.
They improve mobility, productivity & efficiency of labour.
6. Infrastructure development plays a
significant role in the generation of employment opportunities. They improve
mobility, productivity & efficiency of labour, large investment,
development of industry, agriculture, etc.
7. Development of backward regions &
imbalances is another significance of infrastructural facilities. In the absence
of infrastructural facilities In the backward region, may likely to act as a
severe constraint on the economic development of these region.
8. It may also act as an instrument of
social change. Development of industry , transport facilities, education,
service & technology, growth of towns & cities, etc. may change the
outlook of people.
9. A close link b/w infrastructure
spending & GDP growth has been established. Studies have revealed that 1%
growth in the infrastructure stock is associated with 1% growth in per capita
GDP.
Importance of Transport in India Economy:
1. Development
of Market:
Transport is a most for the development & expansion of market. In India transport
helps & facilitates the development of regional, national &
international markets for goods & services.
2. Large
– Scale Production:
Development of transport enables large-scale production with the development
& expansion of market, demand is created for various produced goods. This
helps to solve the problem of demand for goods.
3. Territorial
Division of Labour:
Transport results in territorial division of labour. Transport helps the region
to gain specialization in those goods & services in which conditions are
favourable for production.
4. Price
Stability: Price
fluctuations are common in a big country like India. Transport helps in
stabilization of prices.
5. Mobility
of Labour & Capital:
The movement of labour & capital from one use to another is possible by
means of transport. This helps effective & efficient use of labour &
capital.
6. Growth
of town & Cities:
Transport helps faster growth of town & cities. It also removes ignorance
of people, makes them move civilised & reduces dependence on agriculture.
7. Employment
Generation:
Transport enables employment opportunities. It provides employment to lakhs of
people both directly & indirectly.
8. National
Defence:
Transport plays a major role in national defence. It helps in the
transportation of soldiers & war equipments, medicine & food during
ware & emergency.
9. Unity: India is a country with people of
different religious, caste, language helps to bring together people through
efficient communication. It helps protect unity of the country.
10. Development
of Agriculture & Industry:
Transport provides help to the development of agriculture & industry. It
helps transport of raw materials & equipments to industries, inputs to
agriculture & also assist expansion of market for industrial &
agricultural goods.
11. Social
Change: Transport
brings about social change. It established communication among people of
various regions & makes them to live in a co-ordination manner. It also
brings about changes in the attitude of the people by helping the growth of
towns & cities.
12. Breaking
the Isolation: In
a country like India
transport links b/w the different regions & the people of different
regions, which has actually removed isolation. In short, transport has reduced
the vastness of the country.
13. Revenue to Govt.
14. Place & Time Utility.
15. Development of Trade.
16. Solution to Population Problems.
17. Efficient use of resources.
18. Balance Regional Development.
19. Meeting Emergencies.
20. Efficient Administration.
Merits & Demerits of Road
Transportation------
Classification of Roads.
In 1943, Nagpur plan has
classified roads into four, they are:
1. National
Highways: They
connect the national capital with state capital & important cities. The
construction & maintainence of these roads is the responsibility of central
Govt. At present India
the total length of national highways is 65,569 km.
2. State
Highways: They
connect important state, cities, district & national highways. The
construction & maintainence of these roads is the responsibility of the
state govt. It covers about 1, 31,899 km.
3. District
Roads: Connect
Taluk Centers, important place, state highways & national highways. The
construction & maintainence of those roads is left to the local bodies. It
covers a total length of about 4, 67,763 km. (March 2004).
4. Village
Roads: They are
the roads that connect Taluk centers with different villages, they are namely
Kutcha roads. It covers a total length of 26, 50,000 km.
Development of Road Transport:
1. Nagpur
Plan: In 1943 the
chief engineers of all the states met in Nagpur
& prepared a 10 year development plan for road transport. This is popularly
known as Nagpur
plan. This plan divided the roads into four, they are:
a) National highways
b) State highways
c) District roads and
d) Village roads.
2. ----------------------------------------------------------------------------------------------------------------------------------------------------.
20
year plan for the development of rural transport.
3. Bombay
Plan: In 1961-81,
the engineers of all central & state govt. met in Bombay in 1957 & prepared a plan for a 20
year road development plan.
4. Lucknow
Plan: This plan
was made by the central Govt. for 20 yrs. For the long term development of
roads in India.
Development of Railway Transport:
The
development & expansion of railway transport has brought about revolution
in transport systems throughout the world, the construction of railways in India was
started in 1844. The 1st railway train in India has covered a distance of 34
km. b/w Bombay
to Thane in 1853.
Importance of Railways in India:
1. Development
of Agriculture:
The railways helps the movement of food crops from the producing centers to
cities & towns & as well supports agriculture by transporting the
required inputs for agriculture.
2. Development
of Train: Railway
transport helps to expand trade by means of establishing markets & the
distribution of goods & services to all the regions of a country.
3. Development
of Industries: Industries
depend largely on railway transport, as it requires heavy & bulky goods
& machinery, which have to be transported from a long distance to the
industries.
4. Revenue
to the Govt.:
Railways brings a large volume of revenue to the Govt. of India.
5. National
Defence: Railways
help in the transportation of weapons, soldiers, food & medicine to the
soldiers during emergency.
6. Large scale transport of goods.
7. Development
of tourisms:
Railways promoters’ tourism by providing more no. of traffic to the tourism dept.
8. Railways helps to establish price
stability through transportation of various goods & commodities required
for the distribution & consumption.
Railway Zones in India
1. Northern Railways.
2. North Eastern Railways.
3. North Eastern Frontier Railways.
4. Eastern Railway.
5. South Eastern Railways.
6. Central Railway.
7. Western Railway.
8. Southern Railway.
9. South Central Railways.
10. East Central Railways.
11. South Western Railways.
12. North Western Railways.
13. North Central Railways.
14. East Cost Railways (Konkan).
15. West Central Railways.
16. \South East Central Railways.
Refer to
business notes for water transport merits & demerits & types of ships,
and, merits & demerits of Air transport.
Air Transport:
Development of Air Transport in India:
The capacity
of air transport in India
was tested in 1911 & the real beginning of air transport started in 1929.
In 1927 civil aviation department was established. In 1932 the air transport
service was extended further to Kanchi, Lahore
& Madras.
In 1946 air transport licensing board was established to give licenses to
private companies. In 1950 air transport enquiry commission was constituted.
This commission recommended re-organisation plans for air-transport. In 1953
the Govt. of India nationalized the air transport in India.
Recent Development:
In 1995 the
Govt. established the National
Airport authority &
international airport authority of India. The Govt. has decided to
give on private lease of major international airports, namely, Mumbai, Kolkata,
Madras & Bangalore & other 24 regional airports are also being
upgraded.
International Airports:
1. Indira Gandhi
International Airport / formerly known as Palam
International airport in New Delhi.
2. Jawaharlal Nehru
International Airport in Bombay (Formerly known as Santacruz).
3. Shubash Chandra Bose international
airport in Kolkata (Formerlyknown as Dum Dum).
4. Menambakkam in Chennai.
5. Trivandrum International
Airport in Cochin (kerala).
6. Bangalore International
Airport.
TRADE
Meaning:
The process
of buying & selling of goods & services is called trade
Types of Trade:
1. Internal Trade: It is one which takes
place within a motion. It is the trade within the political boundaries of
country.
2. International Trade: It is a trade b/w
different nations of the world.
Foreign Trade of India:
Precisely India’s imports
& exports constitute its foreign trade. It has an important role in the
development of a country. As a developing Nation India has to depend much on foreign
trade & thereby avail all the advantages provided by foreign trade. India is
importing all the goods required for development & other necessaries. It
exports a large varieties of goods as well.
Features of India’s Foreign Trade:
1) Increase
in Volume: The
most important feature of India’s
foreign trade is the increase in the volume of trade over the years. In 1950-51
the total value of our foreign trade was only Rs.1251 crores. This has
increased to Rs. 664869 crores by 2003-04.
2) Change
in Direction of Trade:
was a significant change in the direction of India’s foreign trade. Before 1960
UK was the main trading partners & recently India has developed trade links
with America, Germany, France, Belgium, Russia, Iraq, Saudi, Kuwait, etc. &
others developing Nations of Asia & Africa.
3) Change
in Composition of Trade:
Before independence we were exporting primary goods & importing finished
goods but after independence we witnessed a considerable change in the
composition of our foreign trade. Now we are exporting finished goods &
importing capital goods.
4) Divorsed
Exports: Before
independence we use to export primary goods. The traditional goods like jute
products, cotton & other raw materials. But after independence owing to
economic changes & rapid economic development. We started reporting
finished goods. These include engineering goods, motor vehicles, ready-made
garments, handicraft goods, etc.
5) Government
Intervention: The
Govt. involvement is more in international trade & is committed 40 make the
best use of the foreign exchange & implemented. The policy of export
promotion, import substitution & state trading.
6) Trade
Agreement: The
Govt. has entered into bilateral & multi-lateral agreement with various
countries or various nations. This agreement we can increase export &
imports of essential goods & services & such trades are usually
beneficial.
7) Export
Promotion: The Govt.
gives encouragement to exports in the form of tax concessions, subsidies,
market system, providing resources, publicity, etc.
8) WTO: India was liberalized its economic
system. The foreign trade sector is also liberalized. Globalisation has given
much emphasis in 1995 & India
joined. The WTO which has come into existence as replacement to GATT.
9) Deteoriation
in Terms of Trade:
The most alarming development of India’s foreign trade is the
deteoriation in terms of trade. Since 1950-51 to the present day the terms of
trade have been subjected to great fluctuations.
Exports and Imports of India:
During
Pre-British period (16th century), Indian merchants were exporting various
types of manufactured articles especially of textiles, handicrafts which had
world-wide reputation. But after the British role, Indian handicrafts
particularly textiles handicrafts could not face competition from British.
Machine made textiles & hence India’s export trade was confined
only to exportation of raw material.
During the
post independence period, India
has experienced a change in the composition & -- ------ commodities are
also increased in the export list of the country.
Since 1950-51
we see the upward trend in the exports of India, it was Rs.606 crores &
it went up to Rs.2, 93,367 crores during 2003-04. The growth of exports has not
been uniform over the years. During 1950-51 the exports was 6.8% & it fell
to 3.9% in 1965-66. After 1966 it slowly achieved the progress & there
after the growth was impressive (2004-05) the exports registered an increase of
25.6% as against 20.3% during 2003-04.
Composition of Exports:
1) Increase
in Manufactured Items:
The very important development in the composition of our exports is that the
dependence on conventional goods is gradually declining & that of
manufactured goods is increasing. The export of Non-conventional goods,
chemicals, machines, transport equipment, etc. is on the increase. So the share
of manufactured items in our total exports which was 43% in 1960-61 increased
to 50% in 1970-71. It further went upto 56% in 1980-81 & during 2003 – 04
it went upto 76%.
2) Board
Based Expansion:
There is a great increase in exports of engineering goods, iron & steel,
chemicals, sugar, etc. There is also a considerable increase in the exports of cotton
textiles leather goods, tobacco, coffee, etc. Today more than 30000 items have
been included in the list of exports.
Main Items of Export:
a) Primary
Commodities:
Consist of agricultural products, minerals.
b) Manufactured
Goods: The
manufactured goods have become very important items of India’s exports
in recent years, like readymade garments, leather & leather goods, cotton
yarn, jute, handicraft, etc.
c) Service: With the growth in Info. Tech. &
Business process outsourcing (BPO), India has emerged as one of the
important service exporters in the recent years. There was an upward shift in
the growth of service experts from 7.9% during the first half 1990 (15.3%)
during 2001-03 & 04. The contribution of travel, transportation &
miscellaneous is also significant. The services experts increased by 20.2% in
2003-04 of which travel, transportation, software & miscellaneous services
accounted for 16.5%, 13.4%, 48.9% & 18.7% respectively.
Chief Export of India.
1. Textile
Factories & Manufactures:
There is a great demand for India’s
cotton factories & garments in the foreign country. These items have an
important place in our exports. In 1960-61, it fetched a foreign exchange of
Rs.65 crore. This had increased to 44,234 crores in 2003-04.
2. Engineering
Goods: After
independence there was an enormous progress in the exports of engineering
goods. During 1960-61 the total value of exports of these goods was 22 crores.
By 2003-04 it went upto Rs.48,853 crores.
3. Handicrafts: This also occupies an important place
in oue exports during 1970-71. The total value of exports of these items was
Rs.73 crores. It increased to Rs.4867 crores during 2003-04. Exports of gems
& jewelleries was Rs.48,586 crores during 2003-04.
4. Jute
Items: The
exports of these items have decreased in recent years due to various seasons.
It was Rs.135 crores. During 1960-61 & it went upto Rs.1113 during 2003-04.
