Indian Economy - CMA

Transport System and Economic Development

The transport system of a country plays an integral role in its growth for a multitude of reasons. Due to the quick and easy movement of raw materials, machinery, finished goods, etc., it benefits industries. In this article, we will focus on the role of the transport system in the economic development in India.

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Transport System and Economic Development in India

A good transport system can broaden the market for goods. It can also make the movement of raw materials, fuel, equipment, etc. to the places of production easy.

Further, it opens up remote regions as well as resources for production. Also, as transport facilities increase, the demand for motor vehicles, locomotives, ships, etc. increases too.

This leads to the start of industries which specialize in these goods. let’s take a quick look at the transport system and understand how it contributes to the economic development in India.

economic development in India

                                                                                                                                              Source: Pixabay

Indian Railways

Pre-Independence, Englishmen-owned private companies operated the Railways. However, post-Independence, it became a unified State enterprise. Indian Railways is India’s biggest nationalized enterprise.

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Further, it is one of the largest railway systems in the world. In the last few years, the Indian Railways is taking huge initiatives in shifting to Public-Private Participation (PPP) for constructing and operating certain railway infrastructure.

Since it is a public utility undertaking, it has to bear the social burden in the form of:

  • Loss due to coaching services like suburban passenger traffic and
  • Loss due to lower than cost freight rates for foodgrains, coal, fodder, fruits, vegetables, salt, ores, etc.

Learn more about Economics Issues in India here in detail.

Roads and Road Transport System in India

In India, we can classify roads into three types:

  1. National Highways – The National Highways cover a total road length of 66.8 thousand kilometers. This is a mere 1.5 percent of the total length of the road system in India. However, these highways take the burden of nearly 40 percent of the goods and passenger traffic. The National Highway system is our primary road grid. Further, it is the direct responsibility of the Central Government.
  2. State Highways – The State Highways cover a total road length of 154.5 thousand kilometers. This is around 3.8 percent of the total length of the roads in India. The individual States are responsible for the construction and maintenance of State Highways.
  3. District and Rural Roads – There are many roads that have been constructed under the Minimum Needs program (MNP), Rural Landless Employment Guarantee Program (RLEGP), National Rural Employment Program (NREP), and Command Area Development (CAD). The core idea is to link all the villages in the country.
  4. Express Highway- Express highway are the highest class of road. They usually have 6 to 8 lanes.  Currently, approximately 1,583.4 km of expressways are operational in India. The National Highways Development Project by Government of India aims to expand it by adding an additional 18,637 km by 2022.

In India, we have two types of water transport services:

  1. Inland Water Transport or River Transport – This comprises of a wide range of rivers, canals, backwaters, creeks, etc. this is the cheapest mode of transport for certain kinds of traffic.
  2. Coastal or Marine Transport – This comprises the sea surrounding the peninsula of India.

Civil Aviation of India

Air transport helps in the optimization of technological, managerial, and administrative skills in a resource-scarce economy. There are several agencies which provide civil aviation services in India.

Solved Question

Q1. What are the different transport systems in India?

Answer: The different transport systems in India are as follows:

  • Indian Railways – This is controlled by the Central Government and is one of the world’s largest railway networks.
  • Indian Road transport – This includes the National Highways, State Highways, and District and Rural Roads.
  • Water Transport – This includes Inland or River transport as well as coastal or marine transport services.
  • Civil Aviation


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