A

REPORT ON
PROJECT-1
For
Rural Infrastructure Development
Submitted to
INDUKAKA IPCOWALA INSTITUTE OF MANAGEMENT (I 2 IM)
CHAROTAR UNIVERSITY OF SCIENCE AND TECHNOLOGY (CHARUSAT)
CHANGA
Prepared by
Jay.R.Patel
(14BBA030)
Dual Degree B.B.A + M.B.A Programme, semester 5
Under the Guidance of
Kirtimakwana

INDUKAKA IPCOWALA INSTITUTE OF MANAGEMENT (I 2IM)

CHAROTAR UNIVERSITY OF SCIENCE AND TECHNOLOGY
(CHARUSAT)
AT.& PO. CHANGA 388 421 TA: PETLAD DIST. ANAND, GUJARAT
July 2016

DECLARATION

I, PATEL JAY , student of the three-year Dual Degree BBA + MBA program
at IndukakaIpcowala Institute of Management (I2IM) hereby declare that
the report on Project-1 entitled Rural Infrastructure Development
is the result of my own work. I also acknowledge the other works and
publications cited in the report.

Place: Changa
Date:

(Signature)
JAY .R .PATEL

INTRODUCTION
Rural development has been one of the important objectives of planning in
India since Independence. Involvement of the government in rural
development is considered necessary in view of the fact that a sizable
population continues to reside in rural areas despite growing urbanization. It
is also required, as the market force are not always able to improve the
welfare of the rural masses because of certain structural rigidities and
institutional deficiencies existing in these areas. As a result, there is danger
of large section of the rural population to remain outside the field of market
driven growth processes. To enable the poorer sections of the rural
population to participate more effectively in the economic activities has,
therefore, remained the prime objective of Indian planning and the basic
underlying theme of rural development programmes.
This unit aims to familiarize you with the various approaches to rural
development in the post-Independence phase. We will cover the evolution of
various Programmes and schemes from the 1 st five year plan to the 10 th five
year plan. In order to understand how these have been changed/modified
over time to respond to the emerging needs and situation.

What is rural development?

Rural development is utilization, protection and enhancement of the natural,
physical and human resources needed to make long-term improvements in
rural living conditions. It involves provision of jobs and income opportunities
while maintaining and protecting the environment of rural areas.
There is no universally accepted definition of rural development. The term is
used in different ways in vastly divergent context.
As a concept, it means overall development of rural areas with a view to
improve the quality of life rural people. As a phenomenon, it is the result of
various physical, technological, economic, socio-cultural and institutional
factors. As a discipline, it is multi-disciplinary in nature representing an
intersection of agricultural, social, behavior and management of science.
In short rural development is a process that aims at improving the standard
of living of the people living in the rural areas.

The concept of rural development

The meaning of rural development has been subject of much debate and
little agreement. The definition of rural development varies from one point if
view to the other. The definition of rural development may be centered
around income criterion in which the concept is made to address the problem
of rural poverty.
Rural development as the improvement in the living standard of the rural
residents by engaging them in productive activities such as establishment of
rural industries that will increase their income. It is seen by these scholars as
a means of raising the sustainable living of the rural poor by giving them the
opportunity to develop their full potentials.

It has changed in the past 3 decades

Until 70s rural development was equal with agro, development.

It goes beyond growth, income and output.

Quality of life- health, education, nutrition, living conditions

Reduction in gender equalities

Objectives of rural development

The main objective of rural development is improving the living standards of
rural people by utilizing the easily available natural and human resources.
The other objectives of rural development programmers are as follows:1. Development of agriculture and similar activities.

2. Development of village and cottage industries and handicrafts.

3. Development of socio-economic infrastructure which includes setting
up of rural banks, co-operatives, schools etc.
4. Development of community services and facilities i.e. drinking water,
electricity, rural roads, health services etc.
5. Development of human resource mobilization.

Importance of rural development

Improvement in the quality life of rural people is the important agenda of
rural development programme. In India-a country where the number of
people living in rural areas, rural development programme is necessary
aspect.
Rural development implies both the economic betterment of people as well
as greater social transformation. The basic objective of all rural development
programmes has been the welfare of the millions. In order to achieve this,
planned attempts have been made to eliminate poverty, ignorance and
inequity of opportunities. A wide spectrum of programmes has been
undertaken so far, to alleviate rural poverty and ensure improved quality of
life for the rural population especially those below the poverty line. In the
initial phase of planned rural development, the concentration was on sectors
of agriculture industry, communication, education and health

Challenges in Rural Development

71% of Indias population is rural

29% of rural population is below the national poverty line

Rural poverty declined at 0.73% per year

46% of rural children under five, 40% of adult women and 38% of adult
men are underweight

59% are small and marginal farmers and landless laborers who depend
on agriculture

Recent policy shifts for rural Infrastructure Development

In the last decade, there has been a significant evolution of the role of the
state in the provision of these public goods. Government has significantly
shifted away from the production of public goods to focusing on the
regulatory and policy framework that would generate adequate provision of
these public goods.
Major policy initiatives taken by the government in recent years for
infrastructure development which are given below:-

POWER

Electricity act notified in June 2003 allows state electricity reforms

commissions to fix rates through a transparent process of request as
per guidelines issued by the central government.

28 states have signed the tripartite agreement for one time settlement
of the dues of state electricity boards of the central public sector
undertakings, and 27 states issued the bonds amounting to Rs. 290
billion

50,000 mega vault hydro electric initiatives launched in may, 2003.

TELECOM

The FDI limit for telecom was recently increased to 74% from 49%.

Unified licensing rule for telecommunication services and license for

unified access(Basic and Cellular) service introduced.

Intercommunication usage charges Regulation, 2003 notified.

Universal social obligation fund set up a separate non-lapsable fund.

ROADS

The National Highway(NH) Development plan has been extended to

seven phases, concerning 65,000 kms of national highway, from the
previous two phases, involving 13,000 kms.

Bharat jodo project for development of 10,000 kms of roads

connecting state capitals with National Highways launched.

RAILWAYS

Rail Vikas Nigam set up in January 2003

Metro Rail in Delhi city started operations.

AIRPORTS

The government has allowed the restructuring and privatization of

Delhi and Mumbai airports and construction of Greenfield airports at
six metros.

Community Development Program

The aim of Community Development was to bring about economic and social
changes in rural areas specially of poor by increasing all round production,
and improvements in agriculture, dairy, animal husbandry and related
industries, health, education, transport, communications etc.

Objectives of the program:

Leading rural population from long-lasting under employment to full

employment.

Leading rural population from continuing agricultural under-production

to full production by use of scientific knowledge.

The largest possible extension of the principles of collaboration by

making rural relations credit-worthy.

Increased community efforts for the advantage of the community as a

whole, such as village roads, tanks, wells, schools, community centers,
children's parks etc.

Functions and Activities:

Increase in production and employment in agriculture

Establishment of cooperatives

Help of cottage, medium and small industries

Facility of roads and road transport services

Provision of free education at elementary stage

Providing of sanitation and public health measures

Establishment of housing

Donation of community entertainment

MERITS

An organization has come to exist through which it has become

possible for the Government to reach the rural population.

An administration set-up has been established which is particularly

skilled for and allocated to the work of economic development and
welfare activities in the rural areas.

Training facilities have been organized to train managements at

various levels to man this program.

Institutions have been recognized to allow peoples participation in this

operations of this program.

DEMERITS

Welfare of the weaker section ignored

Uneven delivery of benefits

Peoples involvement declined.

Peoples attitude towards program

Improper planning

Absence of political will

Priorities not clearly defined

Unqualified personnel.

Lack of functional responsibility

Activities in Community Development Programme

a) Agriculture and Related matters:

The programme includes recovery of available virgin and desert;
provision of commercial fertilizers and improved seeds; the promotion
of fruit and vegetable cultivation, of improved agriculture method and
land operation.
Supply of technical information, improved agricultural tools, improved
marketing and credit facilities; provision of sol surveys and prevention
of soil destruction, encouragement of the use of natural and compost
droppings and improvement of livestock.
The principal stress here being on the establishment of key villagers for
education pedigree stock and the provision of veterinary aid, as well as
artificial conception centers.
b) Irrigation:
The programme visualizes provision of water for agriculture through
slight irrigation works, e.g. tanks, canals, surface wells, tube wells etc.
the intention being that at least half of the agricultural land, if possible,
be served with irrigation facilities.
c) Communication:
The road system on the country side is to be so developed as to link
every village within the project area up to a all-out distance of half a
mile form the village, the latter distance being connected by feeder
roads through volunteer labour of the villagers themselves, only the
main roads being provided for and preserved by the state or other
public actions.
d) Education:
It has been understood that the full development of a public cannot be
achieved without a strong educational base, alike for men and women.
The community projects have been planned to provide for social
schooling, expansion to basic type, provision of educational amenities
for working children and raise of youth welfare.

Occupational and technical training will be highlighted in all the stages

or the educational programme. Training facilities will be provided for
communicating improved techniques to existing artists and
technicians, both in urban and rural areas. Training centers which
already exist in any area, will be supported and developed, and new
ones established to meet the necessities of the project area.
e) Health:
The Health Organization of the project area will consist of 3 primary
health unit equipped with a hospital and a mobile dispensary at the
head office of the project area and serving the area as a whole.
It would aim at the improvement of ecological hygiene, including
provision and protection of water supply; proper removal of human and
animal wastes; control of widespread diseases such as Malaria,
Cholera, small-box, Tuberculosis etc.
Provision of medical aid along with appropriate defensive measure, and
education of the population in hygienic living and in improved nutrition.
f) Supplementary Employment:
The jobless and the underemployed persons in the village community
will be provided with profitable employment to such extent as in
possibly by the development of cottage and small-scale industries,
building of brick-kilns and saw mills and inspiration of employment
through participation in the tertiary sector of the economy.
g) Housing:
Apart from the provision of housing for community projects employees,
steps will be taken, wherever possible, to provide protest and training
in improved techniques and designs for rural housing. In jammed
villages, action in the direction of development of new sites, opening of
village parks and playgrounds and help in the supply of building
materials, may also be necessary.

Bharat Nirman

Under Bharat Nirman, development works are undertaken in the areas

of irrigation, road, rural housing, rural water supply, rural electrification
and rural telecommunication connectivity.

There are the goals of Bharat Nirman fall within the mandate of the
min. of rural development:
o Rural connectivity
o Rural housing
o Rural water supply

Specific targets so that there is accountability in the progress of this

initiative.

Bharat Nirman an effort to unlock rural Indias growth potential and

Key for unhearing a new era.

National Common Minimum Programme(NCMP)

Goals & Objectives of Bharat Nirman Program

Every village to be electrified.

Every habitation over 1,000 population in general and above 500 in

hilly and tribal areas in particular to be connected with all-weather
roads.

Every habitation to have a safe source of drinking water. In addition, all

habitations, which have slipped back from full coverage to partial
coverage due to failure of source, and habitations, which have water
quality problems, to be provided with sustainable source of safe water
supply.

Every village to be connected by telephone.

10 million hectares of additional irrigation capacity to be created in the

country.

60 lakh houses to be constructed for the rural poor all over the country.

Merits

The Rural Housing Sector was the single sector which achieved 100%
target.

61 lakhs dwelling units were build in four years against the target of 60
lakhs promised, which was commendable.

Funds were never the hindrances, in four years 1.14 lakh crores were
spend out of allocated 1.74 lakh crores, that amounts to almost 2/3 of
the spenditure.

Demerits

Almost 50,000 habitats had no road connections in 2005 and by the

end of 2009 March less than 50% got the promised road connectivity.
Dalits living in smaller habitats and Tribal living in forests have been
largely ignored.

In Irrigation sector out of the promised 10 million hectares of land to be

brought under surface irrigation only 5.6 million hectares was actually
achieved.

In safe Drinking Water sector only 4.8 lakh villages were covered
against the target of 6 lakhs villages, and the declared villages having
safe drinking water.

Key Programmes for Rural Infrastructure Development

1. National
Rural
Act2005(NREGA)

Employment

Guarantee

Act guarantees 100 days of employment in a financial year to every

household

A social safety net for the weak groups and an opportunity to

combine growth with equity.

Structured towards harnessing the rural work-force, not as

recipients of doles, but as productive partners in our economic
process

Assets created result in sustained employment for the area for

future growth employment and self-sufficiency

2. Sampoorna Grameen Rozgar Yojana(SGRY)

It was launched on 25th of September 2001

Objectives of providing additional wage employment ensuring

food security while creating durable community, social &
economic infrastructure and assets in the rural areas

SGRY along with National food for work programme(NFFWP) have

been included in the NREGA districts

3. Swarnjayanti Gram Swarozgar Yojana(SGSY)

Self employment programme for the rural poor

The assisted families may be individuals of groups

Emphasis is on the group approach

To bring the assisted poor families above the poverty line by

providing them income generating assets through a mix of bank
credits and government subsidy

Organization of poor into self-help groups and taking care of

training, credit, technology infrastructure and marketing

Implemented by the district rural development agencies with the

active participation of the banks, the line departments, and
NGOs

Main features of SGSY

Formation of self help groups of rural below poverty line.

Capacity, Building and skill development training.

Provision of credit linkage and subsidy for economic activity

Credit linked subsidy is provided in the form of revolving fund

and capital subsidy.

25% of the allocation for infrastructure and marketing support

15% of total allocation for special projects in the nature of

pioneer projects, capable of triggering growth impulses.

Reservation of benefits for SC/STs (50%), women (40),

Minorities (15%) and the disabled (3%) Swarozgaris.

Areas of concerns under SGSY

Uneven spread (weak in the poverty pockets in the country)

Poor quality of SHGs

Inadequate flow of credit need of multiple doses of credit

High interest rates

Need a strong and huge team of community resource person

Inadequate institutional agreement for training

Fund driven rather than need based

Little flexibility to states

Most of the SHG enterprise economically unviable

Need for up-scaling of placement linked skill development

projects

4. Pradhan Mantri Gram Sadak Yojana(PMGSY)

Introduction

The Pradhan Mantri Gram Sadak Yojana or PMGSY is a nationwide

plan in India to provide good all-weather road connectivity to
separate villages.

It is under the authority of the Ministry of Rural Development and

was begun on 25 December 2000. In order to tool this, an Online
Management & Monitoring System or OMMS GIS system was
developed to classify targets and monitor progress.

It is developed by e-governance department of C-DAC pune and is

one of the biggest databases in India.

The goal was to provide roads to all villages

With a population of 1000 persons and above by 2003,

With a population of 500 persons and above by 2007,

Goals

In hill states, tribal and desert area villages with a population of

500 persons and above by 2003, and

In hill states, tribal and desert area villages with a population of

250 persons and above by 2007.

Objective

The primary objective of the PMGSY is to provide Connectivity, by

way of an All-weather Role to the eligible distinct Habitations in
the rural areas, in such a way that all Unconnected Occupancies
with a population of 1000 persons and above are covered in
three years (2000-2003) and all Unconnected Habitations with a
population of 500 persons and above by the end of 2007.

In respect of the Hill States (North-East, Sikkim, Himachal

Pradesh, Jammu & Kashmir, Uttaranchal) and the Desert Areas
(as identified in the Desert Development program) as well as the
Tribal (Schedule V) areas, the objective would be to connect
Occupations with a population of 250 persons and above.

The PMGSY will permit the Upgradation (to prescribed standards)

of the current roads in those Districts where all the eligible
Habitations of the chosen population size have been provided allweather road connectivity.

5. Indira Awas Yojana (IYA)

Celling on construction assistance under the IAY currently is

25,000/- per unit for the plain areas and Rs. 27,500/- for the hilly
terrains/difficult areas.

To important transparency to the selection process of

beneficiaries, a permanent waitlist is being prepared under IAY.

60 lakh houses are to be constructed in a period of 4 year from

2005-06

Against this overall target, 15.52 lakh were built in 2005-06 and
14.98 lakh homes in 2006-07

Objectives of the Program:

The objective of Indira Awas Yojana is primarily to provide grant
for construction of houses to members of Arranged Classes/Scheduled
Tribes, freed bonded workhands and also to non-SC/ST rural poor below
the poverty line.

Strategies to be implemented:

Priority in Selection of Recipients

Freed bonded laborers

SC/ST families who are victims of murders

SC/ST households, headed by widows and unmarried women.

SC/ST households affected by flood, fire, earthquake, cyclone and

similar natural calamities.

Other SC/ST households.

Non- SC/ST households.

Physically handicapped.

Families/widows of personnel of defense services / Para-military

forces, killed in action.

Exiled persons on account of developmental projects.

Budget allocation for the building of houses.

Merits:

Recipients directly involved in the construction to ensure quality

of construction.

Ban on contractors or departmental construction.

Suitable construction technology and usage of local materials to

minimize the cost of construction.

Houses to be designed in agreement with the desire of the

beneficiaries keeping in view the climatic conditions.

Provision of fuel efficient challahs, drinking water supply and

hygiene & sanitary latrines to make the houses functional.

Environmental improvement and social forestry so as to get fuel

and fodder.

Demerits:

Money allocated for the building of houses is not sufficient

enough.

The criteria for selection of recipients should not be on the basis

of caste but all the displaced should be benefited from this
scheme.

6. National Social Assistance Programme (NSAP)

To provide public assistance to its citizens in case of

unemployment, old age, sickness, and disablement within the
limit of the economic capacity of the state

Launched for fulfillment of this obligation in 1995-96

o National old age pension scheme
o National Family Benefit Scheme
o (IGNOPAS) launched in 19.11.2007

7. Rajiv Gandhi National Drinking Water Mission

Objectives

To ensure permanent drinking water security in rural India.

To ensure drinking water security through measures to

improve/supplement existing drinking water sources and
conjunctive use of groundwater, surface-water and rain water
reaping based on village water budgeting and security plan
prepared by the community/local government.

Delivery of services by the system for its entire design period of

quality of water in conformity with the agreed standards at both
the supply and consumption points.

Issue of portability, reliability, sustainability, convenience, equity

and consumers preference to be the supervisory principles while
planning for a community based water supply system

To enable groups to monitor and maintain surveillance on their

drinking water sources.

To ensure that all schools and anganwadis have access to safe

drinking water.

Implementation Strategies:
To meet the emerging challenges in the rural drinking water sector
relating to availability, sustainability and quality, the components
under the program will be as follows:

Coverage for providing safe and adequate drinking water supply

to unserved , partially served and slipped back habitations

Sustainability to encourage States to achieve drinking water

security at the local level

Provide potable
habitations

Desert Development Program areas to tackle the extreme

conditions of low rainfall and poor water availability,

Mitigate drinking water problems in rural areas in the wake of

Natural Calamities.

Operation & Maintenance for expenditure on running, repair and

replacement costs of drinking water supply projects

Support activities

drinking

water

to

water

Quality

Merits:

Increased Availability of Water/Reduced Breakdowns

affected

Improved Environmental Sanitation & Reduction in Water Borne

Diseases

Improvement in Womens Conditions

Utilization of Time Saved

Installation of Rain Water Harvesting Structures

Demerits:

Despite the imposing coverage of

water facilities in the rural areas,
between the intended service level
has been created and the service
level.

The program has so far mostly been managed by the

Government (except Swajaldhara projects), without active
contribution of the stakeholders. This has posed a hindrance to
the development of more well-organized and lower cost options
for service delivery and also denied an opportunity to users to
exercise their options as consumers to request better service
delivery.

In the years to come, the rural water supply program will face
serious challenges by way of meeting the increasing needs of a
fast growing population, increasing demand for higher service
levels attended by rapid depletion of fresh water availability due
to climate change.

Role of NGOs

Identification of poor

provision of safe drinking

there is considerable gap
for which the infrastructure
available at the household

Capacity building and training

Infrastructure support

Marketing support

Monitoring and social auditing

Career counseling for youth

Database of youth-skills inventory and aptitudes survey

Opportunities for skilling training

Opportunities for placement

Self employment

Schemes for rural infrastructure development

1. District rural industries project

Aims:
NABARD on a pilot basis had launched an combined area-based
credit increase program in collaboration with Government, Banks and
other development agencies with focus on district known as District
Rural Industries Project (DRIP) during 1993-94 with a view to
developing a role model for rural industrialization.

Objectives:
Creation of significant number of maintainable employment
chances in rural areas through enhanced credit flow to RNFS with
balancing financial and non-financial publicity support.

Strategies to implement:

Focused Attention

Systematic Planning

Participatory Process

Coordinated efforts

Credit plus Approach

2. Remote Village Electrification Program

Aim:
By focusing on un-electrified remote census villages and distant
hamlets of electrified census villages, the program aims at bringing the
welfares of electricity to people living in the most backward and
disadvantaged regions of the country.

Objectives:
The objective of the Remote Village Electrification program (RVE)
is to captivate all the remote census villages and remote villages of
electrified census villages through nonconventional energy sources

such as solar energy, small hydro power, biomass, wind energy, hybrid
systems, etc.

Strategies to implement:
All un-electrified remote survey villages or remote hamlets of
excited census villages, which will not be electrified by conservative
means by the end of the Eleventh Plan (2012), as certified by the
concerned Power Department / State Electricity Board, are qualified for
coverage under the program.

3. National Social Assistance Program

The National Social Assistance program (NSAP) is a well-being program
being managed by the Office of Rural Development.
This program is being applied in rural areas as well as urban areas.
NSAP represents a significant step towards the fulfillment of the
Directive Principles of State Policy enshrined in the Composition of
India which enjoin upon the State to assume within its means a
number of welfare measures.
The welfare events are intended to secure for the countries adequate
means of livelihood, raise the standard of living, improve public health,
provide free and required education for children etc.

Objectives of the program:

To ensure that social protection to the recipients everywhere in

the country is uniformly available without break.

To provide social assistance welfares to poor families in the case

of old age, death of the worker and maternity.

Present Status:
Presently NSAP now comprises the following five schemes
1. Indira Gandhi National Old Age Pension Scheme (IGNOAPS):
Under the scheme, BPL persons aged 60 years or above are permitted to a
monthly pension of Rs. 200/- up to 79 years of age and Rs.500/- thereafter.
2. Indira Gandhi National Widow Pension Scheme (IGNWPS):
BPL widows aged 40-59 years are entitled to a monthly pension of Rs. 200/-.
3. Indira Gandhi National Disability Pension Scheme (IGNDPS):
BPL persons aged 18-59 years with severe and multiple incapacities are
entitled to a monthly pension of Rs. 200/-.
4. National Family Benefit Scheme (NFBS): Under the scheme a
BPL household is entitled to lump sum amount of money on the death of
primary worker aged between 18 and 64 years. The amount of assistance is
Rs. 10.000/-.
5. Annapurna: Under the scheme, 10 kg of food grains per month are
provided free of cost to those senior citizens who, though eligible, have
continued uncovered under NOAPS.

Merits:

The Program is a good effort on the part of the Government to essence

resources on those most in need.

The schemes applied in the program are progressive as they are an

indirect method of redeployment of resources vertically from the rich
to poor.

The program attempts to provide social security and thus is a good

creativity aimed at welfare of the people.

The schemes are quite flexible in their application. Though funded

entirely by the Central Government, it gives expert and flexibility to the
States to tool the schemes at their discretion.

Demerits:

Though the program has positive impacts and has been applied well,
various media coverages suggest that the various schemes are nonuniform in their application across the country.

Lack of mechanization of database and Operationalization is a

interference to quick delivery of service; this leads to lack of
transparency and accountability in the application in many areas.

The schemes are often complex and difficult to manage due to lack of
accuracy in available database.

4. Provision Of Urban Amenities n Rural Areas

Provision of Urban Amenities to Rural Areas (PURA) s a
strategy for rural development in INDIA . This concept was given by
former president Dr. A.P.J. Abdul Kalam and framed by Prof.Emerson.
Provision of rural urban amenities in rural areas proposes that urban
infrastructure and services be provided in rural hubs to create economic
opportunities outside of cities.
Objectives:

To stem rural-urban immigration

To bridge rural-urban divide

To provide balanced socio economic developments

To expand consumer base

Employment generation in three sectors- Agriculture, Service

and Industrial

Increasing the purchasing power of the rural people and

increase per capita income.

Improving the literacy and health care delivery system.

Capacity building
development.

Sustainable
contribution
partnership.

Priority funding with concurrent flow of schemes in an

integrated way so that there is visible change in the
development of rural clusters.

with

skill

development
in the rural

development

through
economy

and

business

peoples/community
with public private

Implementation Strategies
1. The rollout of the application action plan over the
concession period shall be outlined in the Full Project Report.
2. The appointed Private Developer shall put in place an
operation action plan for the different sub-projects of PURA over a
construction period of maximum three years and an operations and
maintenance (O&M) period of ten years from the commercial operation date
or the date of conclusion of construction.
3. In order to ensure proper nursing and supervision of
presentation by the Private Developer, an Self-governing Engineer will be
provided to the PURA cluster of Gram Panchayat to supervise and monitor
performance during the project life cycle.

Merits:
Rural India gets the facilities for which most of them
migrate to the urban areas. Adequate job opportunities are created which
helps in regulatory the Rural-Urban Migration.

Demerits:
Rural India needs all those service which are present in
urban India. However, this is not carefully feasible. Rural India is sparsely
populated. And so, delivery costs of services are obviously high. At the same
time income of rural people is fairly low. And so, they can afford only a small
part of service charges.

5. Drought Prone Areas Program

Drought Prone Areas program (DPAP) is the "earliest area
growth program" launched by the Central Government in 1973-74 to
tackle the special problems faced by those delicate areas which are
continually affected by severe lack conditions. These areas are branded
by large human and cattle populations which are continuously putting
heavy pressure on the already delicate natural resources base for food,
food and fuel. The major problems are continuous reduction of vegetative
cover, increase in soil erosion, and fall in ground water levels due to
continuous misuse without any effort to recharge the underground
aquifers.

Objectives of the program:

To minimize the adverse effects of lack on the production of crops

and beef and productivity of land, water and human resources.

To promote the economic development and employment group for

the village community is directly or indirectly dependent on the
water shed.

To do the optimum utilization of the Crunch's natural resources like

land, water, vegetation etc. development of human and other
economic resources of the village in order to promote savings.

Implementation Strategies:

Area development programs to be applied exclusively on watershed

basis.

program activities to be limited to the identified crisis of about 500

hectares and to be executed on a project basis spanning a period of
four to five years.

Crisis project to be, as far as possible, co-terminus with village

boundary.

Direct participation of the people in planning and development of crisis

areas and care of assets in the post project period.

Merits:

It minimizes the adverse effects of lack and finally leads to the

drought proofing of the affected areas.

It encourages overall economic development.

It improves the socio-economic

disadvantaged sections.

condition

of

the

poor

and

It gives opportunity of creating, wide and equitable distribution of

the resource base and increased employment chances.

Demerits:

The actual application of the programs in areas varies in

organizational setup for all states, leading to battle varying from
state to state.

The program has not been able to create interests and common
contract among beneficiaries.

There is a agreed (fixed) amount of cost for development of any

type of project under this category.

Evolution and Growth of Firm in India

Indias rise in recent years is a most prominent development in the world
economy. India has re-emerged as one of the fastest growing economies in
the world. Indias growth, particularly in manufacturing and services, has
boosted the sentiments, both within country and abroad. With an upsurge in
investment and robust macroeconomic fundamentals, the future outlook for
India is distinctly upbeat. According to many commentators, India could
unleash its full potentials, provided it improves the infrastructure facilities,
which are at present not sufficient to meet the growing demand of the
economy. Failing to improve the countrys infrastructure will slow down
Indias growth process. Therefore, Indian governments first priority is rising
to the challenge of maintaining and managing high growth through
investment in infrastructure sector, among others.
The provision of quality and efficient infrastructure services is essential to
realize the full potential of the growth impulses surging through the
economy. India, while stepping up public investment in infrastructure, has
been actively engaged in involving private sector to meet the growing
demand. The demand for infrastructure investment during See, Government
of India (2007, p. 16) 106the 11thFive Year Plan (2007-2011) has been
estimated to be US$ 492.5 billion (Planning Commission, 2007). To meet this

growing demand, Government of India has planned to raise the investment

in infrastructure from the present 4.7 percent of GDP to around 7.5 to 8
percent of GDP in the 11thFive Year Plan. In general, efforts towards
infrastructure development is continued to focus on the key areas of physical
and social infrastructure.
The present paper is a shorter version of the India country report carried out
by the author on-behalf of RIS for ERIA. This version presents a quick profile
and prospects of Indias physical infrastructure sector.

Evolution and growth of Firm

Rural infrastructure plays a key role in reaching the large mass of rural poor.
When rural infrastructure has deteriorated or is non-existent, the cost of
marketing farm produce can be prohibitive for poor farmers. Poor rural
infrastructure also limits the ability of the traders to travel to and
communicate with remote farming areas, limiting market access from these
areas and eliminating competition for their produce. Construction of rural
roads almost inevitably leads to increases in agricultural production and
productivity by bringing in new land into cultivation or by intensifying
existing land use to take advantage of expanded market opportunities. (IFAD,
1995). Binswanger et al.(1993), in a study of 13 states in India, found that
investments in rural infrastructure lowered transportation costs, increased
farmers access to markets, and led to substantial agricultural expansion.
Better roads also lowered the transaction costs of credit services, resulting in
increased lending to farmers, higher demands for agricultural inputs, and
higher crop yields. Fan at all.(1998) extend these results to show that rural
infrastructure is not only an important driver for total factor productivity
growth (TFP), but also directly contributes to a substantial reduction in rural
poverty. Based on an econometric model and state level data for 1970-93,
they find that the productivity enhancing investments offer a win win
strategy for reducing poverty while at the same time increasing agricultural
productivity. If the government were to increase its investment in roads by
Rs. 100 billion (at 1993 constant prices), the incidence of rural poverty would
be reduced by 0.87 per cent and TFP would increase by 3.03 per cent.
Similar investment in agricultural research extension would contribute to
6.08 per cent growth in TFP and 0.48 per cent reduction in rural poverty (Fan
et al., 1998).

The Government has traditionally been well aware of the fact that the
availability of adequate infrastructure facilities is vital for the acceleration of
economic development of a country. At the time of Independence, the
government has accepted the crucial role played by infrastructure in the
development process of the country and also realized that given the long
gestation of infrastructure projects and their generally low profitability,
private capital is unlikely to flow into the infrastructure sectors and hence
the responsibility was shouldered by the public sector and infrastructure
development became the domain of the state. Consequently, in the Five Year
Plans, priority was accorded to investments in sectors such as power,
transport, communication, etc. The First Five Year Plan recognized that large
areas of the country have remained underdeveloped due to the lack of basic
services like transport, communication, irrigation and power and this Plan
attached priority to agriculture including irrigation and power. The Plan
sought that agricultural development receives the highest.

INDIAN JOURNAL OF AGRICULTURAL ECONOMICS

precedence that necessitates an extensive programme of investment
covering minor as well as major irrigation projects. Generation of electricity
and power that is linked in most places to the major investment projects was
also a high priority in its own right. In regard to transport also, public
authority has a special responsibility. The State has to take further initiative
in linking up the whole country through the system of roads reaching down
to the village (Thorat and Sirohi, 2002). But in the sixties, while the Plans
continued to emphasize the infrastructure development, there were no
matching financial outlays for these sectors. However, infrastructure
development continued to be an important element from the Indian policy
perspective and the Sixth Five Year Plan, reiterated the need for massive
public investment in rural infrastructure and ensuring that the fruits of
economic progress are more equitably distributed in rural areas. The Plan
clearly one sized that altering the new projects in favor of quick maturing
and directly productive projects, may improve the short term prospects, but
would adversely affect the long term growth rate, as such a choice leads to
less investment in long gestation infrastructure projects (Government of
India, 1981). The Eighth Five Year Plan reemphasized rural infrastructure
development and considered it to be one of the basic elements of an
employment-oriented growth strategy. Strengthening the infrastructure
(energy, transport, communication, irrigation) in order to support the growth

process on a sustainable basis was one of the explicit objectives that was to
be accorded priority in the Plan.
Besides, the development of physical infrastructure, the Plan also one sized
that social infrastructure is to be attended to with a degree of urgency in the
next phase of development (Government of India, 1992). With the large-scale
plan expenditure of the government, the availability of infrastructure has
significantly expanded in the country over the years. The growth in the stock
of major infrastructure items in India has been shown in Table 1. Important
physical items of infrastructure significantly influencing production and
growth in agriculture have grown in the period. Equally important increase is
in the marketing infrastructure including roads and transport, storage and
market facilities which provide impetus to agricultural production growth
through orderly disposal. Similarly the number of regulated markets in the
country has also increased (Bhatia, 1999).

Global Scenario
Other publications in the world economic forums world scenarios series:

The Kingdom of Bahrain and the World: Scenarios to 2025

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The United Arab Emirates and the World: Scenarios to 2025

Technology and Innovation in Financial Services: Scenarios to 2020

Digital Ecosystem - Convergence between IT, Telecoms, Media and

Entertainment: Scenarios to 2015

The Gulf Cooperation Council (GCC) countries and the World:

Scenarios to 2025

China and the World: Scenarios to 2025

India and the World: Scenarios to 2025

Russia and the World: Scenarios to 2025

Indian Scenario
Infrastructure is the total basic vital for any country or city. It is the
road we walk on, the mobile network we connect on and the power
supply network that lights our path.
Infrastructure is a huge government priority, especially for India. After
all, its development is the key to achieving GDP growth targets.
According to the Planning Command, GDP growth is held back by 1.52% every year due to blocks in infra expansion. The sector needs
massive funding. But there is usually a major shortfall between the
command's target and funds that are actually deployed. Retail
investors are also now expected to get into the funding movement,
especially with tax-free infrastructure bonds to be issued by
Infrastructure Financing Companies (IFCs).

Market Players
TOP 10 INFRASTRUCTURE COMPANY IN INDIA
1. LARSEN & TOUBRO INFRASTRUCTURE DEVELOPMENT PROJECTS LTD.
2. GMR INFRASTRUCTURE LIMITED
3. RELIANCE INFRASTRUCTURE LIMITED
4. IRB INFRASTRUCTURE DEVELOPERS LIMITED
5. JAIPRAKASH ASSOCIATES LIMITED
6. NAGARJUNA CONSTRUCTION COMPANY LIMITED
7. HINDUSTAN CONSTRUCTION COMPANY
8. GVK POWER AND INFRASTRUCTURE LIMITED
9. LANCO INFRATECH LIMITED
10. PUNJ LLOYD INFRASTRUCTURE LIMITED

PESTLE Analysis In Infrastructure development

Pestle means:
P- Political
E- Economical
S- Social
T- Technological
L- Legal
E-Environmental

POLITICAL
These refer to government policy such as the degree of interference in the
economy. What goods and services does a government want to provide? To
what extent does it believe in subsidising firms? What are its imports in
terms of business support? Political decisions can impact on many vital areas
for business such as the education of the staff, the health of the nation and
the quality of the infrastructure of the economy such as the road and rail
system.
India is the biggest equality in the World. The government type is federal
republic. Based on English common law, legal review of legislative acts,
accepts compulsory ICJ jurisdiction with reservations, separate personal law
codes apply to Muslims, Christians, and Hindus. The political Situation in the
India is more or less stable.
It includes political stability and the policies of the government. Ideological
inclination of political parties, personal interest on politicians, inspiration of
party forums etc. create political environment. For example, Bangalore
recognized itself as the most important IT center of India mainly because of
political support.

ECONOMICAL
It includes interest rates, taxation changes, economic growth, increase and
exchange rates. As you will see through the "Foundations of Economics"
book economic change can have a major impact on a firm's behavior. For
example:

higher interest rates may deter investment because it costs more to

borrow.
a strong currency may make spreading more difficult because it may
raise the price in terms of foreign currency.
Inflation may provoke higher wage demands from employees and raise
costs.
Higher national income growth may boost demand for a firm's
products.

The economic factors in India are improving endlessly. The GDP

(Purchasing Power Parity) is estimated at about 3.965 trillion U.S. dollars
in the year 2009. The GDP- real growth rate in 2009 was 6%. India has the
third highest GDP in terms of purchasing power parity just ahead Japan
and behind U.S. and China. Foreign direct investment rose in the fiscal
year finished September 2009 to about US$ 10.532 billion. There is a
continuous growth in per capita income; Indias per capita income is
expected to reach Rs. 33283 by the end of 2009-2010. This will lead to
higher buying power in the Hands of the Indian consumers. India GDP is
now 6.5. Today India reserve Us dollar in Good condition.

SOCIAL
Changes in social drifts can impact on the demand for a firm's products and
the availability and readiness of individuals to work. In the India, for
example, the population has been ageing. This has increased the costs for
firms who are dedicated to pension payments for their employees because
their staff is living longer. It also means some firms have started to recruit
older employees to tap into this growing labour pool.
It describes the features of the society in which the organization exists.
Literacy rate, customs, values, beliefs, lifestyle, demographic features and
mobility of population are part o the social environment. It is important for
managers to notice the direction in which the society is moving and
formulate progressive policies according to the changing social scenario.

TECHNOLOGICAL
New technologies create new products and new processes. MP3 players,
computer games, online betting and high definition TVs are all new markets
created by technological fees. Online shopping, bar coding and computer
aided design are all improvements to the way we do business as a result of
better technology.
Technology can decrease costs, improve quality and lead to innovation.
These developments can benefit consumers as well as the organizations
providing the products. Today in India 3G technology starts. A heavy
infrastructure for bandwidth. BSNL and Reliance have more covered city by
optical fiber. India has many Technological Projects. Good Service provider in
IT sector ex TCS, Infosys and many more. Today India is a big market in
mobile sector here 5-6 player operators and new operators launch their
services soon.
(i) IT Development
(ii)New Materials and processes
(iii)Government technology funding
(iv)Speed of technology transfer
(v)Software upgrades

LEGAL
These are related to the legal environment in which firms operate. In recent
years in the India There have been many important legal changes that have
artificial firms' behavior. The introduction of taste and disability
discrimination legislation, an increase in the minimum wage and greater
requirements for firms to recycle are examples of relatively recent laws that
affect an organizations actions. Legal changes can affect a firm's costs and
demand.

This consists of regulation that is passed by the parliament and state

legislatures. Examples of such legislation specifically aimed at business
operations include the Trade mark Act 1969, Vital Commodities Act 1955,
Standards of Weights and Measures Act 1969 and Consumer Protection Act
1996.

ENVIORNMENTAL
Environmental factors include the weather and climate change. Changes in
fever can impact on many industries including farming, tourism and
insurance. With major climate changes happening due to global warming and
with greater environmental awareness this external factor is becoming a
important issue for firms to consider.
The rising wish to protect the environment is having an impact on many
industries such as the travel and transportation businesses (for example,
more taxes being placed on air travel and the success of hybrid cars) and the
general move towards more environmentally friendly products and processes
is moving demand patterns and creating business chances.
In India we know that many types of environmental problems this are basic
things but more important for our environment. Also biotic factors, abiotic
factors and their interaction with one another. Pollution free industrial activity
i.e. is necessary condition of industrial organization.
Industrialization and development have resulted in a profound decline of
India's air quality. Of the 3 million premature deaths in the world that occur
each year due to outdoor and indoor air pollution, the highest number are
assessed to occur in India.
(i)Pollution problems
(ii)Planning permissions
(iii)Waste disposal
(iv)Noise controls
(v)Environmental pressure groups

Porters Five Force Analysis on Railways Infrastructure

Sector

Railways
1. BARGAINING POWER OF SUPPLIERS
1 Consumers
"consumers" has a significant impact, so an analyst should put more weight
into it. "consumers" will have a long-term positive impact on the this entity,
which adds to its value.
2. Self-sufficiency in production of rolling stock
"Self-sufficiency in production of rolling stock" will have a long-term negative
impact on this entity, which subtracts from the entity's value.
2. INTENSITY OF EXISTING RIVALRY
1. Declining growth rate of industry
It has a significant impact, so an analyst should put more weight into it.
"Declining growth rate of industry (Indian Railways)" will have a long-term
positive impact on the this entity, which adds to its value.
2.Government policies and regulations
It can dictate the level of competition within the industry. When they limit
competition, this is a positive for Indian Railways.
3. THREAT OF SUBSTITUTES
1. High cost of switching to substitute
Limited number of substitutes means that customers cannot easily switch to
other products or services of similar price and still receive the same benefits.
High switching costs positively affect Indian Railways.
2. Limited number of substitutes
A limited number of substitutes mean that customers cannot easily find
other products or services that fulfill their needs. Limited substitutes are a
positive for Indian Railways.

3. Substantial product differentiation

Substantial product differentiation (Indian Railways)" will have a long-term
positive impact on the this entity, which adds to its value.
4. INTENSITY OF EXISTING RIVALRY
1.Declining growth rate of industry
Declining growth rate of industry (Indian Railways) will have a long-term
positive impact on the this entity, which adds to its value.
2. Large industry Size
Large industries allow multiple firms and produces to prosper without having
to steal market share from each other. Large industry size is a positive for
Indian Railways.
3. Government policies and regulations
Government policies and regulations can dictate the level of competition
within the industry. When they limit competition, this is a positive for Indian
Railways.
5. THREAT OF NEW COMPETITORS
1. High capital requirements
High capital requirements mean a company must spend a lot of money in
order to compete in the market. High capital requirements positively affect
Indian Railways.
2. High sunk costs
High sunk costs make it difficult for a competitor to enter a new market,
because they have to commit money up front with no guarantee of returns in
the end. High sunk costs positively affect Indian Railways.
3. Economies of scale
Economies of scale help producers to lower their cost by producing the next
unit of output at lower costs. When new competitors enter the market, they

will have a higher cost of production, because they have smaller economies
of scale. Economies of scale positively affect Indian Railways.
4. Entry barriers are high
When barriers are high, it is more difficult for new competitors to enter the
market. High entry barriers positively affect profits for Indian Railways. This
statement will lead to an increase in profits for this entity.
6. BARGAINING POWER OF CUSTOMERS
1. Product is important to customer
When customers cherish particular products they end up paying more for
that one product. This positively affects Indian Railways.
2. Large numbers of customersWhen there are large numbers of customers, no one customer tends to have
bargaining leverage. Limited bargaining leverage helps Indian Railways.

SWOT Analysis
Strengths of Indias Infrastructure Industry
Multiplying domestic and offshore infrastructure funds target the Indian
infrastructure market, driven by strong demand from the transport, power,
urban infrastructure and irrigation segments.
India's government is keen to enable private sector participation in
infrastructure.
Application of takeout financing increased in India, potentially unlocking
around INR300bn (US$6.2bn) in bank debts, which could be used to finance
infrastructure developments in India.
Weaknesses of Indias Infrastructure Industry
Lack of a structured regulatory and policy outline, or well-defined operating
and financing regulations - public-private partnership (PPP) framework and
regulations are unpredictable and lack transparency.
The country is overly administrative, thereby delaying the interest of funds
and deterring investors.

 There are low levels of domestic expertise, stopping from a shortage of

skilled project managers and engineers.
There is low automation and limited use of modern technological
equipment.
Downgrades to investment targets under the 11th Five-Year Plan,
particularly in transport infrastructure, which has been revised down by 20%
in value terms.
Limited long-term borrowing capability on the domestic banking sector due
to an undeveloped bond market.
Opportunities of Indias Infrastructure Industry
Opportunities for Rural projects across all infrastructure sub-sectors.
There is the opportunity for the domestic industry to become more
organized, with the creation of more large firms through biological growth
and achievements. This would improve overall construction quality.
Strong population growth and a growing economy is powering demand for
infrastructure.
The government is looking to attract private companies to invest in
infrastructure through PPPs.
12th Five-Year Investment plan targeting US$1trn in investment, with 50%
to come from the private sector.
Significant investment in electricity generating capacity with ambitious
targets, including 470 gig watts (GW) of nuclear power by 2050, 20GW of
solar power by 2022 and 20GW of wind capacity by 2020.
Threats
India may prove unable to cope with its growing population, which has
passed the 1bn mark, posing a major threat to the economy and political
situation.
Destructive flooding affects productivity.
Obstacles such as red tape, lack of photograph and administrative
complexities will threaten implementation of the 12th Five-Year Plan.
Land clearance issues cause major delays to infrastructure and
construction projects.
An insufficient system for reward and environmental approvals is slowing
investments and, in some cases, preventing projects from progressing.

Value Chain Analysis

Future Outlook
Indias 2016-2017 Union Budget provides a significant outlay for
infrastructure expenditure. This spending is seen as a key component of the
governments plans to boost Indias growth levels to projections ranging
between 7 and 9 percent. The allocation of US$ 32.41 to US$ 32.70 billion
(Rs 2.19-2.21 lakh crore) and a newly relaxed foreign direct investment (FDI)
policy further underline the governments commitment in this regard.
Governments Outlook to Investing in the Indian Infrastructure
Sector

Infrastructure is a key driver for the Indian economy. Increased spending in

this sector has a multiplier effect on overall economic growth as it
necessitates industrial growth and manufacturing. This in turn boosts
aggregate demand by improving living conditions.
The infrastructure sector is extensive and includes electricity, roads, airports,
railways, water systems, public utilities, and telecommunications, the
development of which raises the countrys economic productivity. Highways,
ports, airports, roads, and rail are all necessary channels for commerce,
making their construction, improvement, and expansion all the more vital.
For these reasons, the Indian government has promoted investing in
infrastructure, providing benefits such as the easing of tax restrictions and
multiple financing alternatives. Such a focus on investment to boost GDP is a
clear departure from previous consumption-led growth strategies. This is
reflected in the total budgetary allocation US$ 20.32 billion (Rs 137,333
crore) or almost 30 percent of the Union Budget. Arvind Subramanian, the
Chief Economic Advisor, supporters such targeted public investment as an
engine of growth in the short-run, which complements and crowds-in private
investment.