Overview

There has been heavy investment in the transport sector since Independence and the progress has been significance. But the task is so gigantic that it would require many years and large doses of investment to bring about the desired improvement in the country's transport system.

The bottlenecks, especially in railways, roads and ports, pose a threat to economic growth. The share of railways in freight traffic needs to be improved and passenger services, especially in backward areas, need to be expanded. In the road segment, highway network needs expansion to ensure smooth movement of goods and people. The capacity of major, medium and minor ports also needs to be augmented and the inland waterways developed. The pollution caused by vehicles, especially in large cities, is another problem that needs to be addressed. These are daunting tasks, but by no means unachievable. The entry of private groups into the transport sector is expected to improve things. But the role of the Government will remain paramount.

Significance of Transportation

Effective transportation is indispensable to economic progress. Mining, manufacturing, trade and banking and agriculture are also necessary, but these activities, like many others, depend upon transportation. Without adequate facilities for moving goods and people from place to place, economic and social activities can be carried on in a limited way only. Using a mobility index that combines available data on transport facilities and movement of passengers and freight, Wilfred Owen finds out that immobility and poverty go together. The countries with low per capita had a mobility index for freight and passenger transport in single digits, whereas this index was significantly high in countries with high per capita income. Indeed, a more recent study finds out that every one-percentage growth in the Indian economy presumes a growth of 1.2 to 1.4 per cent in the transport sector.

Economic Functions of Transportation

Transportation is an economic function, that is to say, it serves along with other productive functions in the production of goods and services in the economy.

Creation of Utility. Production has been defined as the creation of utility, i.e., the quality of usefulness. Transportation creates the utility of place, and to a lesser degree, that of time.
As a cost of production. Since transportation is a part of production, an increase in its efficiency helps in reducing the cost of producing goods and thus reduces their prices. Cheaper transportation has both direct and indirect effects on cost of production. Directly, reduction in transport rates laid to overall lower production costs by lessening the outlays for assembling raw materials and shipping finished products by reducing the expense of travel. Indirectly, cheaper transportation tends towards lower cost of production by making possible more efficient extraction and manufacturing, through promoting the division of labour and large-scale production.
Specialization and division of labour. Transportation enables society to enjoy advantages of specializations of resources, ad the benefits of labour by making it possible for products to be brought great distance, thus avoiding the necessity for local production for all conceivable commodities of need. Each economic region can thus concentrate upon the goods and services for which it is best adapted either through natural resources endowment or through historical development. It, thus, leads to a better economic use of available resources.
Large-scale marketing. Closely associated with the foregoing is the fact that transportation helps to expand the size of market. No modern large-scale producer could operate if he will to serve only the local market. Obviously, a large-scale production is possible when the market extends to the whole nation and in a few cases to the whole world.
Consumption of wealth. Transportation is also related to consumption of wealth. It increases the quality and variety of consumable goods, thereby stimulating wants. There is more production because of the decrease in the cost of production brought about by transportation. A greater variety occurs because transportation enables a community to enjoy even those goods that could not be produced in the immediate vicinity.

Social and Political Functions of Transportation

Transportation performs many social and political functions.
Transportation raises the standard of living, making possible improved housing, clothing, food and recreation.
It helps break the barrier of isolation by promoting social interaction and thus promotes culture and intelligence, specially in a country of the size and population of India.
It promotes national unity in that it promotes homogeneity among the people. Another reason is that it creates a need for political unity, by making the different parts of the country economically interdependent.
It helps in the strengthening of national defence. It is an important agency which helps in the mobilization of the entire resources of a country in the event of war and peace.
In modern world, transport along with energy is the basic infrastructural requirement for industrialization. The developing countries have accorded it an important place in their programmes of economic development. Transport provides a vital link between production centres, distribution areas and the ultimate consumers. It also exercises a unifying and integrating influence upon the economy. Important means of transport are railways, roads, water transport (both inland and overseas) and air transport.

Transport Development in India

The programmes of transport development occupy a significance place in our five year plans. Transport has been seen as the basic infrastructure which is crucial for the success of a developmental plan. The second Plan was more forthright in stressing the need for transport development when it stated: "An efficient and well developed system of transport and communication is vital to the success of a plan of economic development which lays stress on rapid industrializations." The theme has run throughout all the plans development. The share of the transport sector has increased over the years, from a mere 1.9 per cent in 1950-51 to about 4.5 per cent in 1994-95.