Yes, Infrastructure acts as a support system for production activity in the economy and thereby contributes to economic development. The following point explain the role of infrastructure :
(i) Infrastructure increases productivity : Infrastructure economic and social facilitates production. The availability of quality infrastructure guarantees increase in production and productivity. Infrastructure ensures easy movement of goods and raw materials thereby reducing inefficiencies and leading to efficient utilization of scarce resources and eliminating wastes.
(ii) Infrastructure encourages investment: Infra-structure provides an environment conducive to investment. Lack of facilities discourage investment. For example, an investor will not invest in the absence of basic infrastructure such as transport and communication.
(in) Infrastructure generates linkages in production : Infrastructure promotes economic development by way of various linkages for-ward and backward linkages. In other words infrastructure provides scope for expansion of one industry due to the expansion of the other by way of forward and backward linkages. The process of economic growth becomes a dynamic process in the presence of sufficient infrastructure facilities.
(iv) Infrastructure enhances size of the market: Infrastructure widens the size of the market. The fast and cost effective movement of raw materials and finished goods in bulk enables a producer to offer his products across the country and even across international boundaries.