The government will divert 10 billion rupees from provincial projects

Islamabad:

The federal government has decided to divert funds amounting to Rs 10 billion from provincial projects to be injected into the Digital Information Infrastructure Initiative.

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

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

The Commission was of the view that the demand for Rs 10 billion was for “expenditure of a recurring nature”, which should be provided by the Finance Department from the current budget through a technical supplementary grant.

In the case of the supplementary grant, the size of the Public Sector Development Program (PSDP) 2023-2024 will be further reduced, thereby adversely affecting public investment. Therefore, the transfer of funds from the development to the non-development budget was not, in principle, supported by the ministry, the committee said.

However, he said that due to the immediate requirement, the Finance Directorate may consider handing over Rs 10 billion from the allocation for provincial projects under the development grant. The amount can be recovered from the division during the fourth quarter of the current financial year.

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

“Implementation of the initiative is critical to mitigating the challenges posed by cyber attacks by protecting critical national information infrastructure,” it said. The Digital Information Infrastructure Initiative aims to provide technical capabilities to proactively identify potential cyber threats in addition to blocking cyber security incidents/breaches in real time.

Regarding the directive of the Prime Minister’s Office to set the terms of implementation, several consultations were held among the stakeholders, where it was agreed that the IT ministry would act as the coordinating ministry, while the Pakistan Telecommunication Authority (PTA) and relevant law enforcement authorities bodies (LEAs) will be the implementing bodies of the initiative.

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ECC approves Rs10b for Digital Information Infrastructure Initiative

It was also agreed that due to the sensitivity of the initiative, LEAs would act as the supplier. Various options for financing the initiative were also discussed.

It is recalled that a summary had been sent to the ECC by the IT ministry in November 2023. The ECC approved Rs 5 billion in bridge funding from the Research and Development (R&D) Fund, which will be recovered by the Finance Directorate in the last quarter of FY24 .

The Federal Cabinet endorsed the decision at its meeting on 15 November 2023. The funding in question had already been used by LEAs/procurement bodies to make advances for the initiative.

The procurement agency pointed out that the first installment of Rs 10 billion for the initiative had to be disbursed by February 15, 2024. In order to release funds for installments, it was suggested that the planning ministry identify sources of funding from the FY24 PSDP.

The ECC considered a brief submitted by the IT ministry titled “Distribution of Rs 10 billion through technical top-up grant during CFY for Digital Information Infrastructure Initiative” and approved the proposal.

It said that as suggested by the Ministry of Planning and Development, the technical supplementary grant should be arranged through the delivery of Rs 10 billion from the allocation for provincial projects under the development grant for FY24.

Published in The Express Tribune, March 3^rd2024.

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