The sectors that catalyze economic activities - namely transport, storage, and communications - had a mixed year in FY16. As per the Economic Survey released last evening, representing 13.3 percent of GDP currently, these service sectors provisionally grew at 4.06 percent this fiscal, below 4.85 percent in FY15. Let's look at the areas that affected that the value-added in this critical economic sector this year.
Road transport FY16 also turned out to be a busy year for road construction firms. Under the command of the National Highway Authority (NHA), asphalt was rolled across 2,182 kilometres on different highways, motorways, and expressways. Overall, road transport grew weakly this fiscal, provisionally at 2.75 percent, which is lower than 4.59 percent in FY15. Data from the Survey suggests that nascent recovery at the Pakistan Railways (PR) may hold fort. The embattled behemoth earned gross revenues of Rs26.4 billion in 9MFY16, which look set to beat Rs31.9 billion it scored the previous year. While FY16 passenger count may not increase this fiscal by a lot over last year's improved figure of 52.9 million, PR has carried more freight in 9MFY16 (3.65 million tons) than full FY16 (3.6 million tons).
It's still a long way for PR to carry 20 percent of national transport - a goal under Vision 2025, up from 4 percent currently - but a positive direction and small improvements are welcome. Air transport grew by a provisional 10 percent, but it was below the 21 percent growth seen in FY15. The Survey stayed silent vis-a-vis latest operational data on the sore wound that is PIA. It talked about PIA's new business plan, which will focus on putting daylight between core operations and non-core activities, rationalizing human resources, and introducing corporate governance at the top. It casts the new registered airline, Pakistan airways, as en entity that will provide quality service and boost competition. As always, the Survey had a lot to talk about telecoms, but little new to say. It celebrated the approval of long-pending Telecom Policy, which got final nod in December 2015. But there is no word on how the industry's grievances, ranging from taxation issues to connectivity bottlenecks, will be tackled. The telecoms watchdog, PTA, however, must get credit for maintaining its regulatory momentum this year, too. As far as telecoms numbers are concerned, user bases for 2G, 3G and 4G networks kept on rising during 9MFY16. But the same could not be said of the telecom revenues, which posted Rs333 billion for 9MFY16. At this rate, telco's would likely close this fiscal below their FY15 revenue figure of Rs450 billion.
If the telco revenues dip this year, it would mark second straight year of negative top line growth for an industry that had its hopes of revival pinned on the launch of mobile broadband services. That should force the government to listen to the operators' legitimate concerns.
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