Infrastructure is the basic requirement of economic development. It does not directly produce goods and services but facilitates production in primary, secondary and tertiary economic activities by creating positive external economies. It is an admitted fact that the level of economic development in any country directly depends on the development of infrastructure.

The developed countries have made a lot of progress due to tremendous growth of social and economic infrastructure.

There has been revolutionary progress in transport and communication in these countries.

Large financial facilities are available due to the existence of well organised banking and insurance.

There is revolutionary progress in science and technology. These countries follow advanced technique of production.

Simply speaking, “Infrastructure means those basic facilities and services which facilitate different economic activities and thereby help in economic development of the country, Education, Health, Transport and Communication, banking and insurance, irrigation and power and science and technology etc. are the examples of infrastructure. These are also called social over head capital. These do not directly produce goods and services but induce production in agriculture, industry and trade by generating external economies. For example, an industry situated on or near the railway line or national highway will produce commodities at less cost.

Here railway line or national highways are the examples of economic infrastructure. They generate external economies and thus induce investment.

Types of Infrastructure:

Broadly speaking infrastructure can be divided in two categories:

(a) Hard Infrastructure

(b) Soft Infrastructure

(а) Hard (or Physical) Infrastructure:

This refers to the physical network that keeps an industrialized nation smoothly functional. Among the components that are classified under the hard infrastructure