Investment in Public Infrastructure : Productivity for Equity T Lalithasiri Gunaruwan Department of Economics University of Colombo Presentation made at CePA Seminar November 24 th 2015 Welfare Infrastructure Socio-economic development needs infrastructure [Ex: Transport Mobility Inclusivity Schools Education Knowledge Social upliftment] Welfare Infrastructure Public Investment Infrastructure calls for Public Investment -Capital Budget of the Government Welfare Infrastructure Public Investment Taxes Debts Public Investment demands either taxation or debts (which again need taxation for their servicing) Welfare Infrastructure Public Investment Taxes Debts Taxation, if not properly structured . over-burdens socially vulnerable segments in a developing economy excessively dependent on indirect taxes . Therefore, it is important to : Make appropriate choice of infrastructure (types and modes) and prioritise among candidate projects and programmes Ensure investment productivity: Design and Appraisal of projects are key Deploy appropriate modality of implementation and execution Resort to most favourable methods of financing Choice and Priority Example : Mobility infrastructure (highway vs railway) CriterionHighwayRailway Capacity< 500 pax per minute (?)>1500 pax per minute Space usage30 m (two lanes per direction) helping poor