Following points highlight the importance of infrastructure in development ^
(i) Impact on Productivity Infrastructure plays an major role in the raising productivity, with improved roadways, warehouses, etc farmers can easily sell their products in different markets. Also, irrigation facilities has reduced dependence on monsoon for water needs, which not only increases productivity but also production level.
(ii) Induces Investment Low investment points to low level of production and backwardness of an economy. A well developed infrastructure attracts foreign investors. Thus, infrastructure induces investment and increases profitability.
(iii) Generates Linkages in Production Better means of transport and communication robust system of banking and finance generates better inter-industrial linkages. It is a situation when expansion of one industry facilitates the expansion of the other.