Definition of Infrastructure

The term “infrastructure” as per Cambridge Advanced Learner's Dictionary is defined as the basic systems and services that a country or organization uses in order to work effectively. Infrastructure is the framework that allows societies to function. The shape of future infrastructural framework will have a direct influence on the future societal nature.

The term infrastructure is referred by various public and private sector organisations to include various kinds of sectors for facilitating policy formulation, sectoral targets setting and projects monitoring in those sectors. For instance, Reserve Bank of India stipulated the term infrastructure to include sectors such as Roads; Port; Airport; Inland water; Water supply project; Irrigation project; Water treatment system; SWM; Telecom services; SEZs; Power; Agro-processing; Construction of educational institutions and hospitals and allowed the commercial banks to treat lending to development, operation and maintenance of projects in any of the above sectors as infrastructure lending, thereby allowing them to greater level of exposure. The Empowered sub-committee of the Committee on Infrastructure, Government of India treat infrastructure to include the following sectors:

• Electricity (G, T&D) and R&D of power stations
• Non-conventional energy
• Water supply and sanitation, SWM; Street lighting
• Telecommunications
• Road & bridges; Ports; Inland waterways; Airports; Railways
• Irrigation
• Storage
• Oil & gas pipeline networks

Charasteristics of Infrastructure Projects

Infrastructure projects are characterised with the following six characteristics:

• Natural monopoly
• High-upfront costs
• Non-tradability of output
• Non-rivalness in consumption
• Presence of externalities