Economics 4 Marks Question

Following are the important features of infrastructure:

1. Public Goods: Most of the physical infrastructure services have some elements of public good in them i.e. it is not always possible to exclude those consumers who chose not to pay for them.
2. Externalities: The social benefit of the infrastructure services is more than the cost involved in their generation. It makes it difficult to price them economically.
3. Monopolies: Monopolies are more prevalent in infrastructure.
4. Public Sector Domination: Public sector dominates in supply of infrastructure due to above mentioned features.
5. Lumpy Investment: Infrastructure projects are such that any expenditure on a part of the project is not useful until the whole project is ready for operations.
6. Indivisibilities: It means one can not divide and sub-divide such projects in small parts and activate them.

The prosperity of a country depends directly upon the development of agricultural and industrial production and their progress in determined by the infrastructural facilities.

1. Agricultural production requires power, credit, transport facilities, etc. the deficiency of which leads to fall in productivity.
2. Industrial production requires machinery and equipment, energy, banking and insurance facilities, marketing facilities, transport services which include railways, roads and shipping and communication facilities, etc.
3. All these above mentioned facilities constitute collectively the infrastructure of an economy. The development and expansion of these facilities is an essential pre-condition for increasing production in a country vis-a-vis the agriculture and industrial sector.

Difference between social and economic infrastructure:

S. No	Social Infrastructure	Economic Infrastructure
1.	It helps the economic system from outside. (i.e. indirectly)	It helps the economic system from inside. (i.e. directly)
2.	It improves the quality of human resources.	It improves the quality of economic resources.
3.	Expenditure on it will raise the stock of human capital over time.	Expenditure on it will raise the stock of physical capital over time.
4.	For example, health, education and housing.	For example, energy, transport and communication.

Infrastructure facilities boost production in the following manner:

1. Infrastructure provides supporting services in the main areas of industrial and agricultural production, domestic and foreign trade and commerce.
2. Infrastructure facilities include roads, railways, ports, airports, dams, powerstations, oil and gas pipelines, telecommunication facilities, educational system, health system, monetary system etc. It is the support system on which depends the efficient working of a modern industrial economy.
3. Modern agriculture largely depends on infrastructure for speedy and large scale transport of seeds, pesticides, fertilisers and the produce by making use of modern roadways, railways and shipping facilities.
4. Infrastructure contributes to the economic development of a country both by increasing the productivity of the factors of production and improving the quality of life of its people.

The problems of energy sector in India are:

1. India's installed capacity to generate electricity is not sufficient to match the growing demands of the agricultural and industrial sectors.
2. State Electricity Boards (SEBs), which distribute electricity, incur losses due to transmission and distribution losses, wrong pricing and other inefficiencies.
3. High power tariffs, prolonged power cuts, theft of electricity, minimum role of private sector only add to the woes of the power sector.
4. Thermal power plants which are the mainstay of India's power sector are facing shortage of raw material and coal supplies.

Economic Infrastructure:

1. Canals
2. Railways
3. Ships
4. Banks
5. Development banks
6. Aerodromes
7. Power plants
8. Transmission lines
9. Satellites

Social Infrastructure:

1. Houses
2. Schools
3. Hospitals
4. Courts

In India public health system and facilities are not sufficient for a large majority of population. India having 17% of the world's population bears a dreading 20% of the global burden of diseases (GBD).

1. In India malnutrition and inadequate availability of vaccines leads to the death of 2.2 million children every year.
2. There is a wide gap between rural-urban areas and also in terms of rich-poor, in utilising the health care facilities. Rural people do not have adequate medical infrastructure. This is responsible for the variation in the health status of people.
3. They lack access to any specialised medical care. In case of any serious emergency they are forced to go for private healthcare, which makes them victims of indebtedness forever.
4. The increasingly large cases of female foeticide and mortality paint a very gloomy picture of the country in general and women's health in particular.

The city of Thane, in its attempt to an environment friendly make over, is trying to acquire a brand new image.
It has been using solar energy on a large scale, to bring in real benefits by way of cost and energy saving results. It has been implemented upon power, traffic lights, heating water and advertising hoarding, with Thane Municipal Corporation leading this unique experiment.
Installation of solar water heating system has been made compulsory for all the new buildings coming up in the city.

Economic infrastructure plays a vital role in promoting the economic development of a country by enhancing the productivity of factor inputs (like land, labour, capital and organisation) and also by bringing about an improvement in the quality of life of its inhabitants. It plays a very important role in the economic development.

1. Infrastructure is the support system, which infact determines the efficiency of a modern industrial economy.
2. Modernisation of agriculture also depends upon large scale and speedy transportation of fertilisers, seeds, pesticides etc. Alongwith, it also depends upon modern railways, roadways and shipping facilities.
3. Not only that insurance and the banking sector too facilitate agriculture in its modernisation process.

The State Electricity Boards (SEBs) suffer from serious deficiencies. Each SEB operates as a state monopoly, combining functions of generation, transmission and distribution of electricity. These boards have to incur huge loss due to transmission and distribution losses of electricity, low capacity utilisation, deficiency in generating equipment, poor quality of coal, underinvestment in the transmission system, inadequate billing and substantial pilferage of power.
The most serious weakness of SEBs is their inability to arrive at and implement an economic power tariff. Both agriculture and domestic sectors are highly subsidised and SEBs suffer huge losses due to the sale of power to these sectors.

Energy crisis in India can be explained on the basis of the following facts:

1. Industrial development in the 18th and 19th century was based on coal, as the leading source of energy. Towards the end of the 19th century, oil replaced coal as the leading energy source. The increase in crude oil prices by OPEC led to escalation of the costs of production. The energy crisis, then, was not a national issue but a global concern.
2. The supply of all commercial fuels has been rising but not adequately. At the same time, the coal industry which was expected to meet the growing energy crisis in India has also been inadequate owing to poor quality and quantity of coal reserves.
3. The demand-supply gap for electricity has been widening due to rising demands of industrialisation and agricultural growth. The supply, on the other hand, has too many constraints and marked with severe shortages and bottlenecks, erratic and inadequate power supply.
4. Apart from balance of payments problem, energy shortages have adversely affected the transport sector, and thereby industrial and agricultural production.

The consumption of non-renewable sources of energy created threat for sustainable development of country and leads to energy crisis. Most commercial source of energy that we are using today are exhaustible also the rate of consumption of resources is faster than the rate of their production so, the resources get exhausted quickly. But on the other hand, renewable resources get renewed or replenished quickly. These are unlimited and are not affected by human activities, such as solar and wind energy. Hence, energy crises can be overcome by the increased use of cost-effective technology of searching the renewable resources of energy.

The three basic sources of generating power are thermal, hydro-electric, and nuclear power. The thermal power uses heat energy as its base for the production of electricity. Hydro-electric power involves production of electricity through the use of kineticforce of falling water. And the nuclear power involves the use of sustained nuclear fission to generate electricity.
The thermal sources, hydro-electric sources and nuclear power accounts for 70%, 28% and 2% of the power generation capacity respectively in India.

Global Burden of Diseases (GBD) is an indicator used by experts to gauge the number of people dying prematurely due to particular disease as well as the number of years spent by them in a state of disability owing to the disease. India bears a frightening 20 percent of the global burden of diseases.
In India, more than half of GBD is accounted for by communicable diseases such as diarrhoea, malaria and tuberculosis. Every year around five lac children die prematurely due to water-borne diseases.
This reveals the poor state of the health infrastructure in India. The public health system and facilities are not sufficient for the bulk of the population. Apart from health facilities, investment is required in efficient systems that provide sanitation and hygiene. It is also a reflection of the ineffectiveness and inaccessibility of health care programmes.