First Thing First-Infrastructure Development

by  H.Lalnunmawia 

The prosperity of a country depends on the development of infrastructure. The development of infrastructure contributes to agricultural development, induces industrialization, and encourages trade and mobility of labour. Physical infrastructure like transportation, power and communication through its backward and forward linkages facilitates growth; and social infrastructure including water supply, sanitation, sewage disposal, education and health has a direct impact on the quality of life. A study of the World Bank shows that in many countries, it has been found that a one per cent rise in infrastructure goes with a one per cent increase in the GDP.

In India the planners were fully aware of the link between infrastructural facilities and general economic development and, accordingly, they gave high priority to the rapid expansion of infrastructure right from the First Plan itself. The plans have generally devoted over 50 per cent of the total plan outlay on infrastructure development. As a result, there has been phenomenal increase in infrastructural facilities in the country. The high economic growth rate achieved in recent years and the success of the new economic reforms can be attributed to the solid foundation of infrastructure built in the early years of planning. No doubt they are still inadequate in quantity as well as in quality but priority was given and they were provided.
The infrastructure development in the North-East India reflects a different picture. The Indian planners have for a long time neglected the development of infrastructure in these regions and it was only in recent years that serious efforts have been made for their development. Infrastructure development entails long gestation period, hence even the recent efforts made by government through the NEC or DONER, etc, could not have the positive economic impact. The problem that ensues is that the existing infrastructure of the North-East could not sustain the various economic reforms measures adopted by the Central Government. The World Bank rightly describes conditions in the region as, ‘a low-level equilibrium of poverty, non-development, civil conflict and lack of faith in political leadership’.
The visible signs of shortfalls in infrastructure in the North-East region can be seen from the increasingly congested roads, power failures, long-waiting lists for installation of telephones and shortages of drinking water. When these signs are visible it indicates the widening gap between demand and supply of infrastructure and also raises questions concerning the sustainability of economic growth in future.
Despite being rich in natural resources, the North-East region, battered by insurgency and weak governance, lags behind the rest of the country in development indicators, like road length, access to healthcare and power consumption — all of which are also below the national average. The gap between development of the north-east and the rest of the country is widening. The per capita gross state domestic product (GSDP) of north-east India, comprising eight states, is 31% less than the national average.
Looking at the various economic indicators (per capita income, education, health etc,) in Mizoram and comparing it with other North-Eastern states the situation seems rather satisfactory. In a survey conducted by India Today, among the small states in terms of Infrastructure Mizoram has consistently ranked 4th from 2004 till 2008, and in 2009 its ranking has improved to 3rd position. The ranking could have even improved because the World Bank Road connecting Aizawl to Lunglei through Thenzawl has been completed.
However, to be satisfied with this kind of statistical comparison and ranking will be misleading if we do not understand the ground realities. It is difficult to appreciate these statistics and rankings when one’s work and life is interrupted by frequent power cuts, congested and dusty roads, water shortage, shortage of cooking gas etc. Moreover, we need to realize that this is comparing and ranking of the better among the worst states in a country which happens to rank the 127th in HDI among countries of the world.
The under-development of infrastructure in the state not only makes life difficult but also raises the cost of living. The high cost of living hits the poor and middle-class people hardest who find it hard to make both ends meet. The high cost of living also encourages corruption among officials and politicians because they know their existing salary and assets will not be enough to maintain their high living standard in the future. The dearth of infrastructure and the high cost of living also discourages the development of tourism industry as well as investments.
Therefore the need of the hour in Mizoram is investing in infrastructure, not bit by bit, but in a robust ‘Big Push’ like strategy as suggested by R. Rodan. There is no society that have unlimited resources. Even advance countries need to divert and channelize their resources in building their infrastructure. This would mean forgoing a number of other development programs that the society can do without.  In this regard we need to work out a framework for prioritizing infrastructure that is aimed at long-term economic goals, at the expense of programs and schemes that appear to be urgent and productive, but are in fact less important. The theoretical economic analysis in favour of infrastructure was also provided by A.O.Hirschman where he argued that ‘infrastructure is the provision of a base for directly productive activities’.
The strategy for infrastructure development in Mizoram should also follow the strategy of developing infrastructure ahead of demand and not in response to the demand only. While the strategy of building infrastructure in response to demand has a tendency to worsen income distribution, the strategy of developing infrastructure ahead of demand can reduce regional and sectoral disparities.
Development of infrastructure will help in raising the growth rate of the state significantly. In providing for infrastructure, the public sector will have to be the major contributor because of such reasons as large and lumpiness of capital investment, long gestation periods; externalities; high risks and low rates of return. However, the traditional view that the government should have the monopoly in this sector is no longer tenable now. In this regard, the private sector will have to be associated as an important supplementary source of finance and builder of infrastructure.
Moreover, it is also essential that the infrastructure delivers its services in the most efficient way, so that the costs of economic growth of the region are the least possible while the benefits flowing from it, the best attainable. It is also necessary that the stock of infrastructure is well-maintained and the necessary repairs and replacements made as when needed. As Dr. V.K.RV. Rao has rightly pointed, “The link between infrastructure and development is not a once for all affair. It is a continuous process, and progress in development has to be preceded, accompanied and followed by progress in infrastructure, if we are to fulfill our declared objectives of self-accelerating process of economic development.”
source: Tromana College