Infrastructure has always been a critical component of the country's growth and development. One of the early proponents of this was Sher Shah Suri, a significant ruler in Indian history, known for his administrative acumen and infrastructure initiatives, particularly road construction. Sher Shah Suri, who ruled over India from 1540 to 1545, undertook significant projects to improve infrastructure, particularly in the field of road networks. He is notably credited with the creation of the historic Grand Trunk Road, which spanned from Sonargaon (in modern-day Bangladesh) to Peshawar (in modern-day Pakistan). The Grand Trunk Road faclitated trade, communication, and military logistics across his kingdom, enhancing connectivity and fostering economic growth. It was equipped with various traveler amenities like trees for shade, wells for water, and rest houses (sarais) for lodging, making it a well-thought-out infrastructure project for its time.
In addition to the Grand Trunk Road, Sher Shah Suri commissioned the construction of other key road networks as well, including the road from Agra to Multan via Burhanpur and Delhi, from Multan to Lahore, and from Mandu to Agra. These roads further connected various parts of his empire, facilitating easier movement of goods, people, and armies. Sher Shah Suri stands as a mere illustration, for there existed numerous predecessors and successors who invested in infrastructure development.
However, much after Sher Shah Suri’s reign, the definition of infrastructure was confined to to tangible, physical entities. This included elements such as roads and ports, as well as canals, which were vital for transportation, trade, and irrigation. As time went on and technology advanced, this traditional definition of infrastructure expanded to include more modern forms of transport and communication like railroads and telecommunication systems. Railroads, introduced during the British colonial era, played a crucial role in connecting various parts of the country, facilitating movement of goods and people, and catalysing economic growth. Telecommunication, on the other hand, revolutionised the way information was exchanged, fostering faster communication and greater connectivity.
Throughout the colonial era, predominantly under British rule from the mid-18th century until 1947, India underwent significant infrastructural transformations. The inception of the railway system in 1853, with the first line from Bombay to Thane, marked a pivotal moment, primarily aiding the transport of goods like cotton and coal for export to Britain. Concurrently, substantial road construction facilitated goods transportation and military mobilisation, while port developments in major cities like Bombay, Madras, and Calcutta bolstered maritime trade. Additionally, the British built comprehensive irrigation systems and canals, notably the Ganges Canal, ostensibly to prevent famines and support agriculture, yet in reality, these projects often encouraged the growth of cash crops for the British economy. By independence, these developments had dramatically reshaped India's landscape, albeit largely in service of colonial interests.
From the 1830s onwards, the British colonial state initiated extensive public works projects across India, including railways and canals. Britishers argued that it led to productivity gains and brought to fore the advantages of railways and canal system. On the other hand, this was countered by nationalists like Romesh Chandra Dutt and Dadabhai Naoroji. They saw the focus of Britishers on tangible infrastructure through the lens of ‘Drain of Wealth Theory’. They contended that the British infrastructure projects were not benevolent but rather a strategic tool for exploiting the Indian economy. Much of the existing research pertaining to this period is narrowly focused on railways and canals (refer to these studies: link1, link2, link3). A research article (https://bit.ly/41QH3Ty) by Aditya Ramesh & Vidhya Raveendranathan on the subject offers a broader perspective and is a must-read for anyone seeking a comprehensive understanding of the infrastructure developments during this period.
Simultaneously, the British made strategic investments in postal, telegraph, education, and health services. The establishment of modern postal and telegraph systems streamlined communication across India's expansive landscape. Moreover, the foundation of numerous universities, schools, and health facilities signified progress, yet access to these services remained frustratingly restricted for many.
Post-independence, the initial Five-Year Plans primarily addressed physical infrastructure. However, upon reviewing the themes encompassed in successive plans, it becomes clear that the concept of infrastructure has progressively broadened in scope, indicating a more comprehensive understanding of the term over time. India's Five-Year Plans consistently prioritised infrastructure development, each with a different sectoral focus. The inaugural plan (1951-1956) underscored agricultural infrastructure, targeting irrigation, soil conservation, and energy. The second plan (1956-1961), known as the "Nehru-Mahalanobis Plan", spotlighted industrial infrastructure, with a keen eye on core industries and transportation. The third plan (1961-1966) sought India's self-sufficiency by fostering higher education, research, agricultural diversification, and major irrigation projects. From the fourth to the seventh plans (1969-1990), the energy sector came to the fore with substantial investments in power generation, oil and gas exploration, and renewables, alongside enhancements in rural infrastructure, telecommunications, and transportation. The eighth plan (1992-1997) heralded a shift towards liberalisation and privatisation, pouring significant investments into telecommunications and facilitating road and air transport improvements. Ninth to eleventh plan (1997-2012) saw significant investments in all areas of infrastructure, including power, telecommunications, roads, airports, irrigation, and urban infrastructure. The Golden Quadrilateral highway network was a major project during this period.
Apart from this, there were several committees on infrastructure, and they have had theor own definition of infrastructure. The definition of infrastructure in India has evolved over time, reflecting the country's changing economic landscape and needs. Various institutions have proposed their definitions, each with a unique perspective, highlighting the sector's multifaceted nature.
The 1996 India Infrastructure Report by Dr. Rakesh Mohan Committee included a broad range of sectors, from electricity, gas, and water supply to industrial parks and urban infrastructure. This was an expansion from the six sectors previously outlined by the Central Statistics Office, excluding industrial parks and urban infrastructure.
The Rangarajan Commission (2001) proposed six characteristics of infrastructure. Based on these characteristics, they recommended a two-stage inclusion of sectors. The first stage included elements like railway tracks, roads, bridges, and pipelines for water, crude oil, and sanitation. The second stage involved rolling stock on railways, vehicles, power-generating plants, and ships, among others. The final list was to be prepared by the Ministry of Statistics and Programme Implementation (MoSPI).
The Insurance Regulatory and Development Authority (IRDA) outlined a more detailed definition in 2008. It included roads, bridges, water supply projects, telecommunication services, industrial parks, power generation, and construction related to agro-processing, among others.
The Income Tax Department defined infrastructure in the context of tax deductions. Their definition covered electricity, water supply, sewerage, telecom, roads, bridges, ports, airports, railways, irrigation, storage, and industrial parks.
The Empowered Sub-Committee of the Committee on Infrastructure, under the Planning Commission in 2008, provided a wide-ranging definition that included electricity, non-conventional energy, water supply and sanitation, telecommunications, roads and bridges, ports, inland waterways, airports, railways, irrigation, storage, and oil and gas pipeline networks.
The Reserve Bank of India defined infrastructure in 2011 for infrastructure lending purposes. The definition covered roads, bridges, water supply projects, telecommunication services, industrial parks, power generation, and more.
The Securities and Exchange Board of India provided an exhaustive list of facilities and services considered as infrastructure in their 2009 regulations. They included transportation, agriculture, water management, telecommunication, industrial, commercial and social development, power, petroleum and natural gas, housing, and other miscellaneous facilities/services.
Today, India has a Harmonised Master list. It is a comprehensive list developed by the union government that classifies infrastructure sub-sectors. It is a crucial document because it enables uniformity in the definitions of infrastructure across different regulatory bodies and government departments. The list was first issued by the Department of Economic Affairs in 2012 and has been updated periodically since then. It includes sectors such as transport, energy, water and sanitation, communication, social and commercial infrastructure, among others.
The Harmonised Master List plays an essential role in infrastructure financing. It helps identify which sectors and sub-sectors are eligible for infrastructure status, thereby qualifying for certain benefits, incentives, and financing opportunities. Since, 2012, the list has been updated several times. The list was last updated on 11th October 2022 (https://bit.ly/3Wibfph). Two new sub-sectors were added, i.e., (i) "Data Centres" in a new item in the category of 'Communication', and (ii) Energy Storage Systems (ESS) in the category of 'Energy'.
India has indeed established a formidable Digital Public Infrastructure (DPI), a testament to the nation's commitment to technological advancement. Given its critical role in today's interconnected world, it's logical and necessary to consider incorporating DPI into the Harmonised Master List. Financing is another critical aspect that deserves careful attention. The recent budget speech by the Finance Minister, where she indicated a planned reassessment of the Harmonised Master List, is a move that aligns with forward-thinking policy.
The story of infrastructure development in India, from Sher Shah Suri to the present day, is a testament to the dynamic and evolving nature of infrastructure. Its definition has broadened over the centuries, reflecting the changing needs and technological advancements of the times.
Bibek Debroy is the Chairman & Aditya Sinha is Additional Private Secretary (Policy & Research) at the Economic Advisory Council to the Prime Minsiter (EAC-PM).
