explain the role of infrastructure in the development of a modern economy?

Dear student
Economic infrastructure is the nerve centre of the economic system. It plays an important role in the development of not only the economy but of the civilization as well. It is a public utility service which gives place and time utility to goods and services. They link production, distribution centres and the end consumers as well. Therefore, infrastructures bring together the elements of the economic system.

To conclude, let us discuss some of the prime role of infrastructures.

1. They help in the development of the market and all the elements within.
2. It also facilitates large-scale production for the purpose of smooth functioning of the economy.
3. They result in the territorial division of labour which is great.
4. They also ensure price stability in the market.
5. Economic infrastructure definitely ensures the mobility of labour and capital within/from the economy.
6. It results in the overall growth of towns and cities.
7. Infrastructures provide for a lot of employment generation and employment opportunities.
8. They also play a crucial role in national defence activities.
9. Infrastructures in the economy directly result in the unity of various economic components.
10. The economy and the nation will be able to meet any emergencies that arise.


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It needs to be emphasized that good quality infrastructure is important not only for faster economic growth but also to ensure inclusive growth. By inclusive growth we mean that benefits of growth are shared by the majority of the people of a country. Thus the inclusive growth will lead to the alleviation of poverty and reduction in income inequality in the country.

For example, micro, small and medium enterprises (MSME) are dispersed throughout the economy and production by them and their growth require access to quality and reliable infrastructure services to compete efficiently with large-scale enterprises which can often build some of their own infrastructure such as installing their own small power plants or generators. Besides, large-scale firms can even locate themselves near ports and near transport hubs where required infrastructure is available.
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