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Infrastructure and its types

this article is all about the types of infrastructure.

Infrastructure is the basic services and system which a country needs in order to function properly. If we talk about a whole nation then infrastructure consists of all the systems that we use in our day to day life such as – water, emergency services, healthcare, education, law enforcement, telephone lines, cell towers, air control towers, bridges, utilities, sewage etc. They all require a very large investment and they are very useful for productivity in an economy. For all such projects the government provides funds or they are heavily subsidized. 

Importance of having a good infrastructure 

Infrastructure is really critical for the growth of the economy. As it will help in reducing poverty in a country. For the Indian economy to compete with other economies there is a need of having an appropriate infrastructure such as good roads, railways, airports etc. These can help in improving India’s economy.

Impacts on an economy due to the failure of infrastructure.

Economic activities may have a severe fall in case of the failure of infrastructure. The magnitude of economic loss is directly proportional to interdependence of economic systems and infrastructure and this creates a serious concern regarding infrastructure vulnerability and resilience. 

Various economic models have been proposed to depict multimodal complex networks and capture the impacts of cascading infrastructure failure in order to reflect the economic repercussions.

There is still no agreement on the best method of calculating economic loss. 

In recent years, input – output analysis has gotten a lot of attention for its capacity to represent indirect or higher- order economic losses. 

Methodologies to estimate economic losses 

There are four approaches to estimate loss- 1. Cost benefit analysis 2. Computable general equilibrium 3. Econometrics 4. Input-output methods. 

  • Cost Benefit Analysis 

Welfare economist often utilise Cost Benefit Analysis to incorporate the monetary and non-monetary components of accidents into decision-making 

CBA based estimates calculate changes in utility as a result of changes in consumer surplus, based on the assumption that consumers incur costs as a result of changes in the availability of products and labour. 

  • Computable general equilibrium 

These are the type of models in an economy that uses real world data to predict how the economy will behave to the policy shift, technology or other external influences. 

  • Econometrics 

Economic forecasting is generally based on econometrics, which is the statistical and mathematical analysis of economic relationships. Governments and commercial businesses both use this information to help them make decisions about prices, inventory and output.

Types of infrastructure 

Below mentioned are several kinds of infrastructure.

  • Soft infrastructure – this type of infrastructure includes all the institutions which are required for the development of an economy. It includes both physical as well as non- physical assets.

This type of infrastructure is essential for providing quality of life to the people living in an economy.

examples of soft infrastructure are- highly specialised buildings, equipment, regulations governing the various systems, communication, it even includes institutions such as banks, schools, colleges, hospitals etc.

  • Hard infrastructure – this infrastructure is a little advanced version which is necessary to run an industrialised nation .

This includes all physical systems such as information technologies, providing basic services essential for economic activity.


examples of hard infrastructure are- capital assets, roads, highways, bridges.

  • Critical infrastructure- All the assets required for the functioning of society is known as critical infrastructure. They are defined by the government. 

All the assets, buildings and some other things on which the society relies on to sustain national security and economic prosperity are termed as critical infrastructure.

Example of critical infrastructure- public health, agriculture, telecommunication, shelter etc.

  • Input – Output methods

A microeconomic approach that is based on the.nice between various economic sectors aur Enterprises is known as input output analysis.

input output is a technique for estimating the consequences of positive and negative economic shock as well as analysing the ripple effect across the economy.

input output analysis models three sorts of impact.these are direct indirect and induced.

Some differences between hard and soft infrastructure .

  1. Hard infrastructure is the physical commodity for the welfare of society. such as- bridges and solar panels. Whereas soft infrastructure includes all the basic institutions necessary for development and care of society such as hospitals, schools etc.
  2. Energy infrastructure is considered as hard infrastructure as they are information technologies which directly support physical systems. Whereas telecom networks are considered as soft infrastructure as they are general information technologies supporting the economic activity.


Infrastructure is a basic physical structure required for the growth and development of a country. It consists of 3 parts- Hard infrastructure(physical structure) 

Soft infrastructure(institutional structures)

Critical infrastructure (government assets and IT projects). Examples of infrastructure are- airports, bridges, education systems, law enforcement agencies etc.


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