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What comprises the infrastructure of a country

this article gives you thorough knowledge of infrastructure and its importance in the economy.

The basic physical system for the welfare of people living in an economy is termed as infrastructure. It may constitute public goods or production processes which support natural monopolies. The basic physical systems like transportation systems, sewage, water and electric systems, and communication networks are all capital intensive and require high cost investments and they are really important for a country’s economic development and prosperity.

Deep knowledge of infrastructure 

Infrastructure consists of small to large organisational frameworks which are required as the essential physical system. 

Even the physical cabling and components required for the data networking of a company are a part of infrastructure as they are necessary for the working of business operations. Infrastructure includes both public goods as well as goods produced by natural monopolies. These kinds of goods usually take the form of direct government production and often subsidised monopoly.

We often call infrastructure the foundation stone on which the building of an economy stands. 

Given below are few groups of infrastructure:-

1.IT Infrastructure

Many firms struggle to communicate and move data in a way that increases workplace productivity without adequate information technology (IT) infrastructure. If IT infrastructure fails many business functions cannot be completed. Due to the functions provided within a specific business environment many technical systems such as networking are considered as infrastructures.  

2.Infrastructure as an Asset Class

As an  Alternative asset class, infrastructure includes investments in buildings, services, and installations that are considered fundamental to a society’s operation and economic production. Asset classes include fixed income, cash, real estate, currencies, commodities etc. 

  1. Private investment in public infrastructure 

For governments that are short on cash, using public-private partnerships to create everything from.airports to parking garages is becoming increasingly common. Private corporations, on the other hand, are becoming less interested in such endeavours.

Individuals might also choose to contribute to the improvement of public infrastructure. If someone wants to contribute in improvising the public infrastructure then they can by building institutions For example- hospitals, schools etc.

Financing of public infrastructure 

Financing of public infrastructure takes place in different modes including taxes which are paid by the public itself, privately through the means of personal investments and through the partnership between public and private.

1.Taxation – it is one of the modes through which public infrastructure may be financed. As public infrastructures are open for everyone so they themselves pay for the infrastructure facilities through the mode of taxes, tolls etc.

2.Investments – public infrastructure tends to necessitate high cost investment projects with extraordinarily large returns. As part of their expansion plans, private corporations may choose to invest in a country’s infrastructure projects. 

  1. Public- private partnerships (PPs)- public private partnerships are defined as a collaboration or agreement between two or more private organisations and the government. The most common method of financing significant public-sector projects is through a public- private partnership. By bringing in investment opportunities, expanding employment options, and raising the standard of living, it helps to distribute risks and make the economy profitable. 

Infrastructure: mining and basic industries 

Basic industries are those industries which provide products to manufacturers for further production.

Capital goods industries –  capital goods are fixed assets of the producers. Producers use these kinds of goods for further production. e.g. plant and machinery. 

Heavy industries – these industries are responsible for the production of large and heavy products e.g. ships building, industrial machinery etc.

Relationship between infrastructure and economic development 

Increase in investment-  irrigation, power credit, marketing, education and other infrastructure all play a role in the development of agriculture. 

Industrial development is heavily reliant on a robust infrastructure foundation. Infrastructure enhances labour mobility, productivity, and efficiency, resulting in more jobs.

Trade and commerce – infrastructure facilitates are critical to the growth of trade and commerce. In fact, they serve as a rapid fire platform for the expansion of commerce and other economic activities. 

As a result, infrastructure improvement has the potential to have a large impact on economic growth. 

Basic infrastructure, such as water, irrigation and to a lesser extent l, transportation, is critical for low income countries. The role of power, transportation, and telecommunications in infrastructure and investment grows as economies mature into the middle income category.

Physical system which we consider in infrastructure are- 

  1. The land we use to travel: roads, railways, tunnels, bridges, flyovers etc.
  2. Water related: Reservoirs, dams.
  3. Hurricane bridges 
  4. Education system- schools, universities, colleges and other institutions which provide education.
  5. police and prison 
  6. Waste removal and sanitation facilities.
  7. Disaster management – fire fighting equipment.
  8. Mass transit system, including buses, elevated trains etc.


Infrastructure is the backbone of Industrial and agricultural output as well as International and Domestic is the most basic organisational and physical structure which is required to run an institution successfully.communication and transportation, sewage water,education, health, safe drinking water and monitoring systems are all example of basic infrastructure in an organisation or for a country.the structure of a country has a direct impact on its economic and social growth because of the massive.expansion of economic and social infrastructure as many developed countries have made significant development a good infrastructure facilitates the work process resulting in increased production capacity.


Frequently asked questions

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