Question 2: Explain the two categories into which infrastructure is divided. How are both interdependent?
Answer:
Infrastructure is broadly classified under two categories:
a. Economic infrastructure
b. Social infrastructure
Economic Infrastructure Refers to the elements of economic change that aid in the process of production and distribution. It improves the quality of economic resources and, thus, raises the productivity of the economy as a whole. In this way, it serves as a support system to economic growth. Energy, transportation, communication, banking and financial institutions are some of the examples of economic infrastructure. Greater the economic infrastructure, greater will be the production and more generation of employment opportunities. Thus, expenditure incurred on the economic infrastructure can be regarded as a necessary condition for economic growth. Social Infrastructure refers to all those facilities and institutions that enhance the quality of human capital. Educational institutions, hospitals, nursing homes, housing facilities etc. are some of the examples of social infrastructures. The availability of such infrastructures raises the human productivity, thereby, improves the quality of standard of living.
Unlike economic infrastructure, social infrastructure indirectly increases the productivity and production of goods and services. For example, availability of better health care and medical facilities enable a perennial supply of healthy workforce that in turn is reflected in the form of increased production levels. Both economic and social infrastructures are interdependent on and complementary to each other. While economic infrastructure fosters economic growth, social infrastructure enhances the quality of standard of living and thereby leads to the welfare of the economy as a whole. The combined effect of these two infrastructures contributes to the prosperity of the economy. The economic growth attained with the help of economic infrastructure is imperfect without t human development which is attained by means of social infrastructure. Thus, one infrastructure supports the other.
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