Asian Journal of Research in Social Sciences and Humanities
Year : 2011, Volume : 1, Issue : 4
First page : ( 104) Last page : ( 117)
Online ISSN : 2249-7315.

Role of transport sector in Indian Economic Development: Challenges in financing world class transportation projects and opportunities created by foreign direct investment

Ms. Preethi S.*, Assistant Professor, Dr. (Mrs) Geetha K. T.**, Professor of Economics

*Department of Economics, Sree Narayana Guru College, Coimbatore – 641105.

**Department of Economics, Avinashilingam University, Coimbatore – 641043.

Online published on 3 January, 2012.

Abstract

A well known and co-ordinated system of transport plays an important role in the sustained economic growth of a country. The present transport system of India comprises several modes of transport including rail, road, coastal shipping, air transport, etc. Transportation in India has recorded a substantial growth over the years both in spread of network and in output of the system. But Indian transportation sector is not without problems and the problems in the sector are not unique to India. India's Eleventh Five Year Plan identified various deficits in transport sector. One of the major problem the transport sector faces is the insufficient funds to finance its major projects aiming at building world class infrastructure. This article attempts to bring out the significance of FDI in financing India's major transport projects. Moreover, this paper makes it apparent that inflow and outflow of FDI to other sectors of the economy depends on the efficiency and reliability of the transportation sector among the other factors. The major challenges in the transportation sector and the initiatives taken by the government to build state-of-the-art infrastructure are also discussed.

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