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The ubiquitous mobile phone is today emblematic of one of aspirational India’s great success stories in the 21st century. But the spread of mobile phones in the country also reflects a great irony: while digital connectivity is surging ahead rapidly, basic physical connectivity appears to lag behind. The increase in mobile and internet connectivity in India has been much faster than the growth in our road and rail networks.

India’s experience in this regard has been similar to several other developing countries, where growth in digital connectivity has surpassed improvements in physical connectivity since the turn of the century. While it takes little state effort to push digital connectivity, growth in physical infrastructure requires much greater governmental interventions. As this year’s economic survey points out, in infrastructural provisions such as rural roads and railways, private investment will be under-supplied, necessitating massive state investments.

Such investments are costly. But they are also likely to lead to significantly higher growth over the long term if such investments are well-directed, according to an October study on public investments in infrastructure published by the International Monetary Fund. Economies such as China which have invested heavily in such infrastructure have reaped rich dividends from such investments over the past few decades.

By focusing on improving road and rail connectivity, this year’s budget seems to suggest that India is ready to follow in China’s footsteps.

Prabhat Singh contributed to the story.

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