Infrastructure is generally defined as the physical framework of facilities through which goods and services are provided to the public. Its linkages to the economy are multiple and complex, as it affects production and consumption directly, creates positive and negative spillover effects and involves large inflow of expenditure (Goel, 2002). It is a widely recognized fact that the availability of basic infrastructure facilities and services flowing from these are vital for economic development of the country. If well developed, they stimulate economic development but if inadequate they prove to be hindrances in the growth process.

The concept of infrastructure was probably introduced for the first time by Singer (1950) who identified investment in infrastructure with investment in certain facilities that are regarded as necessary for development. According to Hirschman (1958), infrastructure consists of those basic facilities without which primary, secondary and tertiary activities cannot function. These facilities play an important role in creating investment opportunities in other industries.

Singer (1950), Nurkse (1955), Kindleberger (1958), Bheil (1986), to name few authors, have given a comprehensive list of items that they consider being important pre-requisites for development. Infrastructure is usually defined as the stock of all-social overhead capital i.e. (directly or indirectly) necessary for smooth functioning of all direct productive capital. Usually infrastructure has the following characteristics:

• Essential but not directly productive
• Pre-requisite for development
• Non-importability
• Lumpiness(technical indivisibility)
• External economies
• Provision by the State

The World Bank treats power, water supply, sanitation, sewerage, communication, roads and bridges, dams and canals, ports, airports, railways, waterways, housing, urban services, oil/gas production and mining sectors as infrastructure (World Development Report, 1994, p.2).

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Dr.Rakesh Mohan committee report in 1996 entitled “The India Infrastructure Report” included Electricity, gas, water supply, telecom, roads, industrial parks, railways, ports, airports, urban infrastructure, and storage as infrastructure. Except industrial parks and urban infrastructure, all these sub-sectors are treated by Central Statistical Organization also as infrastructure.