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September 26, 2019

Fast Fact: Connectivity via roads the main infrastructure impediment for businesses

In a recently concluded enterprise survey of 2,500 firms across 18 districts, we asked firms to identify the three main types of infrastructure that had the biggest impact on their business operations. Connectivity via roads was cited as the main infrastructure impediment across the manufacturing, services and agro-allied sectors. While roads were the top infrastructure issue, electricity and water supply were the next two major issues that were cited most by firms. 


Approximately 84% of industrial firms, 64.5% of services firms and 61.4% of agro-allied firms, reported that the major infrastructure hindrance to their business was related to roads.  Further details can be seen in Figure 1. 


Poor connectivity has multiple detrimental costs for firms. Firms have to incur increased fuel and warehousing costs due to the additional transport time. They also have insufficient linkages to the market and consumers.


The IDFC Institute report, Infrastructure Priorities for Job Creation in India, was undertaken to determine how infrastructure investments can lead to employment creation. It can be accessed here.  


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