Reason 3 for inadequacy of the forces of supply and demand

The third reason why the market forces of demand and supply may be considered inadequate is that some of the basic structures of our economy that are called its infrastructures are still in an undeveloped stage. The nature of the market being what it is, these structures cannot be built rapidly through the market mechanism alone. For example, out economy cannot develop without more roads. We cannot develop without more roads. We cannot control floods, nor generate power on a large enough scale, not irrigate the millions of hectares of our land without building large river valley projects.

Now where and how can a road be sold so that it would be profitable for somebody to produce it quickly? How can we, seeing the long run benefits of a large river valley project sell the idea of a dam for a price to builders? If we cannot, how would it otherwise be possible for someone to find it profitable to invest the thousands of crores that such huge projects need?

In an underdeveloped economy like India the social and economic infrastructures are necessarily in a very rudimentary state. Huge investments of thousands of crores of rupees have to be made to build up these structures of irrigations, power, transport, communication and other social and economic services. It is argued that the market forces if left to themselves would never make it profitable enough to produce these on a large scale in our economy in a short span of time.