Govt to divert Rs10b from provincial projects

Will pour funds into digital information infrastructure

ISLAMABAD:

The federal government has decided to divert funds worth Rs10 billion from provincial projects for their injection into the Digital Information Infrastructure Initiative.

The decision was made as the Planning Commission opposed the diversion of funds from development to non-development projects.

In a recent meeting of the Economic Coordination Committee (ECC), the Planning Commission argued that the National Economic Council (NEC), in its meeting held on June 6, 2023, had approved guidelines that restricted the diversion of development funds to non-development expenses during the current fiscal year.

The commission was of the view that the demand for Rs10 billion was for “recurring-nature expenditure”, which should be provided by the Finance Division from the current budget through a technical supplementary grant.

In the case of supplementary grant, the size of Public Sector Development Programme (PSDP) 2023-24 would be further reduced, thereby adversely affecting public investment. Hence, the transfer of funds from the development to non-development budget was not supported, in principle, by the ministry, the commission said.

However, it said that because of the immediate requirement, the Finance Division may consider surrendering Rs10 billion from the allocation for provincial projects under the development grant. The amount may be recouped by the division in the fourth quarter of the current fiscal year.

The Ministry of Information Technology and Telecommunication briefed the meeting that Pakistan’s information and communication technology (ICT) infrastructure was a key component of the cyberspace and was prone to cyber-attacks.

“Implementation of the initiative is crucial to mitigate the challenges posed by cyber-attacks by protecting the critical national information infrastructure,” it said. The Digital Information Infrastructure Initiative is aimed at providing technical capabilities to proactively identify potential cyber threats besides blocking cyber-security incidents/ breaches in real time.

On the directive of the Prime Minister’s Office to firm up implementation modalities, several consultative sessions were held among the stakeholders, where it was agreed that the IT ministry would act as a coordinating ministry while the Pakistan Telecommunication Authority (PTA) and the relevant law enforcement agencies (LEAs) would be the implementing agencies for the initiative.

Read ECC okays Rs10b for Digital Information Infrastructure Initiative

It was also agreed that owing to the sensitivity of the initiative, LEAs would serve as the procuring agency. Various options for funding the initiative were also discussed.

It was recalled that a summary had been sent to the ECC by the IT ministry in November 2023. The ECC approved Rs5 billion in bridge financing from the Research and Development (R&D) Fund, which would be recouped by the Finance Division in the last quarter of FY24.

The federal cabinet ratified the decision in its meeting on November 15, 2023. The said funding had already been utilised by LEAs/ procuring agency for making advance payments for the initiative.

The procuring agency pointed out that the first installment of Rs10 billion for the initiative was due by February 15, 2024. In order to make funds available for installments, it was proposed that the planning ministry may identify financing sources from the FY24 PSDP.

The ECC considered a summary submitted by the IT ministry titled “Allocation of Rs10 billion through technical supplementary grant during CFY for the Digital Information Infrastructure Initiative” and approved the proposal.

It said that as proposed by the Ministry of Planning and Development, the technical supplementary grant should be arranged through surrendering Rs10 billion from the allocation for provincial projects under the development grant for FY24.

Published in The Express Tribune, March 3^rd, 2024.

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