Just a quick introduction, right, about what’s infrastructure.

Alright, so and the best way to do this, is to ask you.

Ok.

So what is infrastructure?

Ok, structure, system and I am also going to say enabler.

Alright, anyone else want to….Do we completely agree with what Arjun has said or do we like,

do someone want to add anything on to this or disagree?

Yeah (points to someone) makes life simple, wonderful.

Ok. ok.

Yeah now the thing is, is that ahh is that something generic that would apply to a variety

of things or is that something specific to infrastructure?

Value for money, aahh right, I mean even if I bought an apple, I would want value for

money, I don’t want an rotten apple for 50 rupees, right and I would love a juicy

apple for 1 rupee which I can never get.

h right, so that’s I think that’s something more of a characteristic so I wouldn’t,

so I am trying to define infrastructure.

So may I should not sort of put that under the definition.

Yeah, sure, go ahead.

h fine, structure we will sort of says, oops.

Sorry I need to get used to pressing the right buttons on the screen.

Ok, so physical, yeah, alright.

Essentially so far we have, it could be a physical structure, it could be not necessarily

a physical structure, it could be a system.

It enables, it facilitates, makes our life simple, alright.

Any other , ahh, yeah (points to someone) aahhh ok, hopefully sustainable, fine.

Alright, anyone else want to throw up anything?

h, does it necessarily though?

In some ways, in some ways, I mean, this is the, kind of depends on how you define bringing

people together.

But one might argue that telecommunication infrastructure actually keeps people apart.

Right, so I don’t need to come together.

Ok, so I am not quite sure that it brings people together.

Some kinds of infrastructure connect, ahh right.

So roads for instance obviously provide connectivity.

h, it’s an interesting question, right.

So I am not quite sure, for instance housing is also infrastructure and it is more of a,

I am not quite sure, it might not be a property of all of infrastructure.

Although, it does work for several aspects, several kinds of infrastructure, right.

Alright, so, ahh these are all interesting, now I get the feeling though that all of you

or many of you, right, yeah (points to someone) sorry, measurement criteria, so it is a criteria

for measurement of development right, so that’s, that’s fine.

But is that what infrastructure is?

Right, I am talking about, I am trying to get us to define what infrastructure is.

Now I think many of you are defining infrastructure or thinking about infrastructure as an asset.

Right, it’s a thing.

Right, it’s sort of, I mean it’s a building, it’s an airport or whatever.

Right, it’s an asset and that is one way of thinking about it.

But, you got a point, yeah (points to someone).

All levels, alright.

So the question is how many of us really think of infrastructure as a service, right?

So and this is something that we really want to think about in terms of how we define infrastructure,

right.

So when I define infrastructure, do I define it as an asset, right?

It is something that I build which, or do I define it as something that provides this

kind of a service, right.

And you will find that in what you have said, there is a little bit of a mix of both, right.

The makes life simple is certainly more of a service criteria, right, but the physical

structure for instance is more of an asset kind of definition.

So I think the important thing to understand is that infrastructure is both asset and

service.

And this is critical, alright.

Because if we think of infrastructure as an asset we will be tasked with building good

quality assets, which means you build the fanciest thing that you can build, perhaps

the most expensive thing that you can build, whatever.

But it may not necessarily provide service.

It may not necessarily make life simple.

It may not necessarily enable or facilitate.

It may not be sustainable and it might not hit all levels of society, right.

And this is actually fundamentally very important because a lot of people when you say, Ok list

some infrastructure we often think roads, bridges, power plants, airports, ports whatever,

right.

We think assets and assets of course are key.

But what I want us to do in this course is think of infrastructure as a service, right.

Infrastructure is all about providing you the service to do something that will enable

you make your life easier, make you more productive, make you more wealthy, make you more comfortable

whatever it is, right.

It is all about enabling.

So there is no, so there are no points for building the most expensive, most complex

from an engineering perspective asset if you are not delivering the service, right.

So when we think about infrastructure I think we need to think really more in terms of service,

alright.

So you guys didn’t do the readings but essentially some of the definitions that you will, you

can later on look at, there is a, there is a brief intro chapter for this session.

People talk about infrastructure as something that is public in the sense it is open to

everybody, delivers essential services, helps achieve economic as well as social objectives

and it is essentially a foundation or a base on which society rests.

You don’t have infrastructure then you are in, you are in big trouble.

You are essentially going back to a period in time where you know, human kind was essentially

congregated around small settlements and almost completely self-sustaining because you didn’t

have the means to transport.

You didn’t have sort of sources of energy to do things that were technologically advanced

etc right, which is obviously a situation we can’t even imagine ourselves in now.

So it is essentially the base or the backbone on which society rests and there are examples

of infrastructure.

There are tons, right.

h, in this class, right because ultimately we are in an engineering institute and I am

an engineer by training and all of that, when we talk about infrastructure we will restrict

ourselves by and large to what we call physical infrastructure, right, which means roads,

ports, airports, waterways, water and sanitation systems, power, telecom.

We won't really get into things like education, right which people also classify as infrastructure,

right.

It is also, you know backbone along which society should rest, right.

So there are, what, some people call this social infrastructure, right.

So we may not really get too deep into social infrastructure, right because in my view it

becomes very difficult define performance parameters around social infrastructure, very

tough problem, right.

If you give me a bridge and you tell me how do I tell in 20 years if this, or in 10 years

if this bridge was successfully built or not, I can come up with a number of criteria, right.

I can look at the physical characteristics of the bridge.

Has it, you know, is there any sag, this, that etc.

I can look at the use of that bridge, how many people have used that bridge etc, what

was the cost of maintenance and I can come up with the decision.

But when I go to a school and I say, is this a good school or not, right?

Very difficult answer, right.

What would you say?

100 percent of people passed twelfth standard and so it is a good school?

May be but we know that passing twelfth standard does not mean anything.

May be these people just memorized everything in the book perfectly, right, got great grades

but did not quite learn, right.

And therefore on the other hand, because some people failed, is it a bad thing?

Or there is a school where the academic performance is mediocre but they do very well in, you

know arts and sports and all of that.

Mean how do we even sort of start judging?

So metrics around social infrastructure are much more difficult and so that to me is a

second order problem, right.

Let us first get to the easy stuff, right and then we will get there.

So this class will focus more on the easy part of the difficult stuff which is the physical

infrastructure, alright, by and large, right, so not on the social infrastructure, right.

I looked at the Merriam Webster Dictionary some years ago, it said underlying foundation

of basic framework of a system or an organization is how they define infrastructure.

So it is an underlying backbone but is not just a physical asset, right.

It’s tied towards the service that it delivers, right.

And so when we think infrastructure we need to think service.

So we design infrastructure that provides better service, not infrastructure that is

low-cost, right, that is the way you would think if you were designing an asset.

If you are thinking an asset, you would say, let me reduce the cost, right.

Let me put in as many bells and whistles as possible so that, you know it is something

that is magnificent that people will comment upon, right.

All of that relates to the asset.

It may not relate to the service, right.

In fact low cost and service might be inversely correlated.

It may make more sense to spend more money upfront to provide lasting value, right.

So may be a more durable surfacing of the road is more expensive but the road will be

in better condition for 10, 15 years

As opposed to reducing the cost of the road today, right and giving a project plan to

government saying, oh I am going to build you a very cost effective road and finding

that you will have to maintain it 5 years down the line, right.

So think about it as service and not as asset, alright.



So all kinds of infrastructure, this is the kind of stuff we will be talking about in

this class, transportation, water sanitation, energy, telecommunication, housing, right

may be even a little bit of, we are not really going to talk about it but, you know parks

and all of that are also a part of, you know, of physical infrastructure, alright.

Ok

So I have got a couple of minutes so I will leave you guys with one thought, Ok and then

we will stop here, alright.

So there is this guy called Quieroz and I have, sort of, his article is part of that

reader and when you guys pick it up you can read it, right.

So Quieroz talks about this graph that people in the World Bank came up with a long time

ago, right.

And so the graph is quite simple.

On the X axis, right you have a measure of infrastructure quality, right.

How do you measure infrastructure?

These guys said let us measure it based on the number of kilometers of paved roads that

are there in the country.

So if a country has lot of paved roads then the infrastructure is better.

If a country has very few paved roads, kachcha roads etc infrastructure is worse, right.

So that is a measure of infrastructure growth.

Now some people will say Switzerland is a tiny country.

India is a much larger country.

So obviously in India there will be more paved roads than in Switzerland, right.

So how does that work?

So we divide it by the number of inhabitants or million of inhabitants or whatever so we

get some normalized figure, right.

So India for its 1.2 billion people there are so many kilometers of paved roads per

million people; and in Singapore, in Switzerland, in Turkey, in whatever right.

So the X axis is a measure of the infrastructure of the country.

The Y axis is the wealth of the country, right which is measured in terms of GNP Gross National

Product similar to GDP, Gross Domestic Product whatever, right.

So this is wealth, this is infrastructure, right and what does the graph tell us?

Right, the graph tells us that there is actually a wonderful correlation, right.

So what we are saying is countries here, right have a relatively low wealth, GDP is low,

also relatively low quality of infrastructure.

Countries here relatively high wealth, relatively high quality of infrastructure, right.

Country is here, medium wealth, medium quality of infrastructure.

We really don’t find countries here, high wealth no infrastructure, right.

Or country is here, right superb infrastructure, no wealth, right.

And if you remember your statistics, There is something called an R squared that tells

you the goodness of fit and all of that, and the R squared is pretty high, 0.76.

Right, I mean 1 is perfect correlation, 0.76 is pretty high and this is 98 countries, right.

So I think there are roughly, I do not know 170, 180 countries in the world I think at

the moment, right so this is a little, and this was done a little bit earlier.

So this was probably about 60 percent of countries in the world.

So the evidence is quite stark, right that infra so if you want the country to go and

somebody mentioned this, right.

So if you want the country to go, you want the country to be strong then one of the levers

that you have to change is certainly infrastructure

Doesn’t mean, don’t focus on education, don’t focus on health care but infrastructure

is critical, right to country's growth, Ok.

So, and there is a lot of evidence.

Other people have changed this.

They have said why only look at roads?

Let us look at the amount of water supplied per capita, right.

That is the measure of infrastructure, right.

Or the amount of energy supplied, you know per capita whatever and you will get very

similar graphs irrespective of what you do, right.

So I think that the conclusion is relatively inescapable that infrastructure and the wealth

of the country are very strongly linked.

Therefore if the, the…

At some point if we sort of say what can we do to make India better country etc one of

the things we certainly need to focus on and something that the government has had in its

sights for a while is infrastructure, right.

There is only one problem with this graph.

What is the problem?

One problem with the interpretation of this graph

(Professor – student conversation starts – student voice not captured)

So the causality is always a question.

Now do countries become rich because they have infrastructure or do rich countries invest

in infrastructure?

Right because I am rich I have more infrastructure, because I have more money?

Or because I have more infrastructure am I, so that becomes very difficult to unpack from

this graph.

Right, essentially I have 2 variables; it is very difficult to tell which direction

the causality goes in, right.

So I don’t,

So there is a bit of truth in both, right.

Infrastructure does lead to a greater wealth, so the more roads I have, the more produce

can get shipped faster.

So there is less sort of, less cabbages and tomatoes get spoilt on the way because my

roads are faster, more things get sold and there is more wealth that is created, right.

More electricity, more of us can do productive; you know tasks after the sun has set, right

and our weekend study or whatever and therefore the wealth of the country can increase, right.

Better quality water supply, you know we fall ill less often because there are fewer water

borne diseases.

We are therefore more productive.

Wealth increases.

So there is certainly an argument, qualitative argument to be made that if infrastructure

is better wealth can increase.

But clearly if you are a very wealthy country you tend to build, you know better Special

Economic Zones and facilities.

There you attract other companies to come in from all across the world and you know

those kinds of things, right.

So there is a little bit, but irrespective of the direction of causality, right.

And there are pros and cons to both.

The point is infrastructure and economic growth are linked, right.

And therefore you really need to focus on infrastructure if you are focusing on economic

growth, Ok, is essentially the lesson here.

So and I think that is all I wanted to sort of talk about today.

Sort of introduce what infrastructure is, get this point home that we are thinking of

infrastructure as a service, not as an asset, right and also show that infrastructure and

economic growth are intertwined.

So if you want the country to develop, among other things infrastructure is key, right.

And what we are going to talk about is how many of you believe we have wonderful infrastructure

in India?

Ok, couple of people, alright.

How many of you believe we have infrastructure that needs to be improved considerably?

Alright, everyone else.

Alright so I fall in the, in the majority category as well.

I think we have some good infrastructure, right but by and large I think our infrastructure

across industries are, are performing terribly.

So then the question is why, what can we do about it and that is what we will talk about

in the class, alright, Ok.

So I will stop here.