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5) Discuss the role played by transport infrastructures in developing financial markets vis-à-vis economic growth.(250 words)

Topic :Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

5) Discuss the role played by transport infrastructures in developing financial markets vis-à-vis economic growth.(250 words)

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Why this question:

The article discusses in detail a study that highlighted how The Golden Quadrilateral highway network spurred greater financial activity but only in areas with existing financial development.

Demand of the question:

The answer must discuss the role played by infrastructures in developing financial markets vis-à-vis economic growth.

Directive word:

DiscussThis is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Structure of the answer:

Introduction

Start with brief introduction on importance of transport system for economic growth of a country.

Body

One can have the following points in the answer:

Economic  Growth: A  good  transportation system  is an important selling  point to communities that desire to attract development that provides for employment and growth of a city. If transport costs due to congestion increase, goods and services produced within that city tend to increase in costs  thus losing  competitiveness  in international  markets. Efficient  transportation access  is therefore  a very important  consideration as it  has a direct impact on  sound and sustainable economic growth and productivity. The cost of congestion in the Western Province of Sri  Lanka is over Rs 20,000 million per year (around 2 percent of Regional GDP). This includes the cost of productive time and wastage of fuel.   

Quality-of-Life: To some people, congested highways are a symptom of deteriorating quality-of-life-in a community.  The amount of time that is spent on commuting to and from work is also in reality, time that is taken away from social interactions or pursuit of activities that have a personal value and satisfaction.

  • Discuss in detail how investing in infrastructure in regions with basic financial development can help regions overcome barriers to economic growth.
  • Explain with the case study of India’s Golden Quadrilateral network.
  • Discuss the Indian scenario – present status, what more needs to be done in this direction etc.

Conclusion

Conclude that financial markets respond to large infrastructure investments and helps spur real economic outcomes contingent on initial financial sector development

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