This issue marks our twenty-second anniversary. In our past special anniversary issues, we used to review trends and developments in the previous 12 months, examine key issues and discuss the future outlook.
This anniversary issue is necessarily different. It is about the past five months, the impact of Covid-19 on infrastructure sectors, the response of the government and what we can expect going forward.
The impact of Covid-19 has not only varied from sector to sector, but also from sub-sector to sub-sector. Telecom has done better than electricity. Within electricity, distribution has suffered greater revenue losses than transmission.
But it seems that even as the number of Covid-19 cases has jumped in the past few weeks, the activity levels in most sectors are now close to or above 85 per cent versus last year. In some sectors, they are close to 100 per cent.
The impact in the April-June period was, of course, severe. Construction and implementation of new projects, in particular, was badly affected. It is still suffering from inadequate labour availability and, to a lesser extent, supply chain disruption.
On the operations and maintenance front, the managers and workers running the nation’s critical infrastructure have risen to the occasion. They have kept it operational, often at the risk to their own health. The grid managers who worked for 48 hours straight or the port workers who have not been home for five months.
Two sectors that have played a crucial role in keeping the sectors, and indeed the economy, operational are electricity and telecom. They have enabled overnight digital transformation, work from home, remote asset management, etc., etc. And kept the lights on.
The government’s response has been, for the most part, satisfactory. There is a bit more it could have done and lots more it needs to do. This issue features suggestions for every sector.
The area that will require the most attention, however, is financing. The government’s hands have been, to be sure, tied by its fiscal position. So we have not seen the magnitude or the type of stimulus that has been provided in many of the other leading economies.
This has made matters more difficult for many sectors of the economy (which were not doing well even pre-Covid) and thus also for banks. Alternative sources of finance become even more important for private sector participation in infrastructure. Whether it is bonds or Invits, insurers or pension funds.
And while the government makes efforts to increase private investment, that will take time. For now, it must keep pushing its own programmes harder and faster, from AMRUT to Sagarmala, from Urja Ganga to Bharatmala.