Thursday, March 02, 2006

Transport Infrastructure in India

Introduction:

It is needless to say that to overcome the constraints of a less developed country, the state must play a positive role. The need for basic services like railways, road transport, telecommunication, gas electricity, water is inevitable for future development. Economic development is not possible without these basic services.

Organization which provides services to the citizens of a country to satisfy the basic needs like Health, Education, transportation, Communication, Electricity, Water etc against the cost of services with subsidies are called public systems. Usually these organizations are owned and managed by the government with large-scale employment of labour and capital.

Since last 14 years after opening of the economy in 1991, the government has welcomed private investment for development of infrastructural facilities all over the country for restructuring and reform in infrastructural sector, its modernization, upgradation and additional capacity creation. The principle objective is to accelerate the rate of economic activities.

According to economic survey 2002-2003, govt of India, industry has experienced a significant revival with growth of 5.3%, which is also reflected in freight traffic movements in major ports, airports and railways. The drivers of change are a) technology b) global competitiveness c) Benchmarking to the best international practices and India is taking full advantage of all the three factors. The industrialized countries have appreciated the IT revolution in India.

Growth Sector: - The country is passing through a phase of saturation in manufacturing sector. The future growth can be in health services, hospitality business, technical education, telecommunication, IT and financial services. There is a tremendous scope of growth of hospitality business like hotel and tourism.

Contribution of Transport: -

With the changing economic scenario, factors such as globalization of markets, international economic integration, removal of barriers to business and trade and increased competition have enhanced the need of transportation. It is one of the most important infrastructure requirement which is essential for the expansion of opportunities and plays an important role in making or breaking the competitive positioning.

Transport volumes in India remain much less than those in the developed countries. India has still to go a long way in strengthening its transportation network. The countries transportation network suffers from several inadequacies and, in particular it has little resilience to deal with unforeseen demands.

Transportation, like all industries is largely influenced by information and communication technologies with the focus being on knowledge of customer needs and value added services. Surface transport is provided by the Road and the Indian Railways (primarily for carrying low value bulk commodity, mostly for the government sector). Cargo Road Transport is entirely in the hands of the private sector. An estimated 1.2 million trucks (9 tons capacity) crisscross the country covering more than 80,000 kilometers of roads. In India road transportation is preferred for cargo movement, where flexibility of routing assumes importance. It facilitates door-to-door delivery, overcoming unnecessary delays which normally take place in the other modes of transportation.

In today's business big or small, domestic or global, the value of time is clearly immense. Business today is focusing on how it can deliver goods and services to global markets in a timely and reliable manner. Besides efficiency in pick up, timely delivery , timely information and availability of other infrastructural facilities for efficient handling of cargo transportation have become the need of the day. In other words prompt customer service is what gives competitive edge to the players of the cargo transportation industry in today's rapidly changing environment. It was this need which stimulated the growth of the express cargo industry worldwide.

The link between transport infrastructure and economic development is like giving water to a tree. The key factor, which largely influences the economic growth process, is the transportation infrastructure. According to the World Development Report 1994, the infrastructure capacity grows in concert with economic output. An 1% increase in the stock of infrastructure is associated with a 1% increase in GDP across countries. India is a country where most of the people reside in rural area. And depend mostly on agricultural activity. In order to get remunerative price on their products, they have to transport the products to the marketing area. For these purpose there must be well road links to the market area and the nearest railway station.

The railway, on the other hand, provides the service between the area of production and the consumers at a distant place and between manufacture in the town and the agriculturist in the village. With the globalisation of economic process, the role of shipping transport has been crucial for national economic growth. The Indian economy is passing through an interesting phase. The growth in GDP is ranging between 7% - 8% and the rate is likely to be sustained over the next five years and the growth drivers are clearly shifting from agriculture to services.

The importance of transport in national economy has been enumerated below.

Ø Transport is the basic service for increasing national income:- As national income rises, infrastructure adopts to support changing patterns of demand, with the shares of power, transport and communication. Transport is one of the most pervasive services within the country. It can be described as a vital sector of growth.
Ø Transport helps to create new economic activity. :- economic development in a country requires adequate and effective transport services. The degree to which transport creates new activity may depend upon equally necessary condition within the economy. Transport is one of the essential elements of an integrated plan for area development.
Ø Transport system is the indicator of development in a country:- One of the major indicator of development of a country is the existence of high quality transport network, availability of number of mechanized motor transport, adequate number of railway, air and shipping services as per the demand of the users. So transport development is synonymous with economic growth. To overcome the deficiencies in various modes of transport, emphasis is laid on improvement of transport infrastructure. Effective transportation systems have been playing a vital role in the economic prosperity of a country.
Ø Transport enlarge the trading activities of a country:- The industrially developed countries lay more emphasis on the development of this sector to enlarge not only their trade but also to increase the frequency of the passenger service. The search for an integrated system combines the merits of the individual transportation modes and eliminates the uneconomic and unproductive activities.
Ø Transport influence daily life of the people: - It influences economic development, population distribution, energy consumption, access to markets, and materials and pace. On the international scene, transportation is the connecting link, which permits the exchange of goods and the people among the nations of the world. It contribute substantially to GDP, provides employment for millions of people.
Ø Transport system is a catalyst of the socio-economic development:- transportation plays an important role in rapid economic development of a country. Improved and effective transportation is indispensable to economic progress. Transport sector bears a close and complex relationship with all other sectors of the economy. Transport acts as an acceleration and catalyst for faster, higher and quicker economic growth.
Ø Transport promotes industrialization:- It increases wealth, promotes industrialization and transforms the organization of industry and transforms the organization of industry, creates urban conglomeration, raises the standard of living of the people and promotes culture. Transport infrastructure services can have significant effects in improving quality of life of the people.
Ø Transport provides access to the rural area: - Good networks of railway and roadways, navigable rivers and canals, coastal waterways and airways turn the liability of far regions into assets by uniting them into a single self-contained economy. Transport system is thus, the nerves of an economy, which stimulates its developments and activities.
Ø Transport system provides the vital linkage between production and consumption:- Development of transport infrastructure helps the globalization of production process. Transport is essential in an economy because the demand and supply of goods don’t reach equilibrium at any particular area or point of time. The need for dispatching the goods arises as they are often produced in one place to be sold and consumed in another place. Transport provides the vital link between the production and consumption point and the objective of production is not fulfilled till the commodity reaches the consumer. Transport, thus, form an integral part of the broader systems of production, distribution and marketing. Transport Infrastructure services is critical for diversification and modernisation of production and distribution process.
Ø Transport is the key factor to link dispersed (scattered) areas:- As a sector of the national economy, transport is characterized by long range investment much of which is devoted for creation of basis facilities such as rail tracks, roads, ports, air terminals, ship building and repairing yards.
Ø Transport increases the economic efficiency of resources. The economic efficiency of resources of various countries is increased with the growth of different mode of transportation over the years. Transport reduces the cost of production and distribution by effective, planned, integrated and co-ordinated network. All nations of the world, whether developed or developing, has to depend largely on transport development for better utilization of resources.
Ø Transport provides mobility of labour and boost tourism industry:-The transport system removes the in-equilibrium in labour market by providing means for mobility of labour from surplus area to deficient areas. The tourism industry also can grow with the transport network to places of tourist importance. Connectivity of transport links help the people to move from one place to the other not only for commercial purpose but also to keep social link with each other.
Ø Transport creates competitive environment: - The adequacy of transport infrastructure is a key factor in the ability of countries to compete in international trade. Competition for new exports and location of global industries largely depends on the quality of transport infrastructure. Increased globalization of world trade in many countries arouses not only from the liberalization of trade policies but also from advances in transportation.
Ø Transport promote social welfare:- The economic characteristics of modern transport infrastructure are the supply of services through a network of delivery systems designed to serve a variety of users. The network in most cases is to achieve the social welfare. Transport services is essential to spread education, extends health services, provide faster distribution of mail and effective public distribution system, which are considered as the basic ingredients to promote social growth.
Ø Transport helps to stabilize prices:- Goods can be transported to places, where there is scarcity for it. By this the consumers can get their desired products or commodities at a reasonable price. Similarly, by transporting goods to the market, the producer gets fair price on their products.
Ø Transport curbs monopoly of the trader:- Facilities for quick transport of commodities from one place to another, restricts the traders to charge high price to the consumers. The demand for a product increases because of non-availability of a product in the market. But availability of adequate and continuous transport facilities fulfills the need of the people.
Ø Discovery of new market:- Invention of new sea routes helped in discovering new lands in various parts of the globe. Similarly discovery of new land routes increases the mobility of goods and passenger traffic and decreases the cost of transportation. To achieve highest international economic order transport plays an important role. Even waste land, forest land, icy land, isolated island can be put to economic use with the expansion of transport network.
Ø Transport provides large employment opportunities.:- growth of various modes of transport provided employment to millions. People can be employed in road construction activities, port development activities, railways construction and service activities, in shipping trade and other related transport activities.
Ø Adequate transport facilities in a country help to combat the natural calamities:- Quick relief work can be initiated after the occurrence of natural calamities such as flood, drought, famine, earthquake and tsunami in a better way with the existence of fast transportation network. Transport is helpful in funding revenue to the govt:- Transport operators pay tax for plying their vehicles. Increase in transportation system facilitates movements of goods and thereby the revenue of the government increases by way of sales tax, outcry, custom duty etc.

7 comments:

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Packers Movers said...

It is needless to say that to overcome the constraints of a less developed country, the state must play a positive role. The need for basic services like railways, road transport, telecommunication, gas electricity, water is inevitable for future development. Economic development is not possible without these basic services.

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