In everyday life, we use various kinds of services and structures; for example, power, communication, transport, hospital, banking, schools, bridges, dams, etc. It seems impossible to imagine a life without these. Such services and structures form an integral part of one’s daily life. In economics, such services and structures are collectively termed “infrastructure”. In this post, we only talk about Economic Infrastructure.
Infrastructure is broadly classified under the following two categories.
- Economic infrastructure
- Social infrastructure
Economic Infrastructure includes the elements of economic change that aid in the process of production and distribution. In other words, it refers to the infrastructure that is essential to the production process. Such infrastructure directly enhances the production process. Energy, transportation, communication, banking, and financial institutions are significant examples of economic infrastructure.
This form of infrastructure improves the quality of economic resources and, thereby, raises the economy’s productivity as a whole. In this way, it serves as a support system for economic growth. The greater the economic infrastructure, the greater will be the production; the greater the production, the greater will be the generation of employment opportunities. Thus, economic growth necessitates the expenditure incurred on economic infrastructure.
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