ISLAMABAD: The Ministry of Federal Education and Professional Training has sought the federal cabinet’s Economic Coordination Committee’s (ECC) approval for a supplementary grant of Rs2.268 billion to the Higher Education Commission (HEC) in order to avoid an expected cancellation of a credit facility under a World Bank (WB) project.
According to sources, the ECC, in its meeting on Wednesday, will make a decision regarding the supplementary grant under the WB project – Higher Education Development in Pakistan (HEDP).
Sources told Profit that HEC failed to complete nine Disbursement Linked Indicators (DLIs) of the project due to shortage of funds which may lead to the cancellation of the credit facility. “The International Development Association (IDA) can cancel $218 million in financial support for the country’s education sector.”
Now, the Ministry of Federal Education and Professional Training has requested the supplementary grant so that it can meet the conditions for accomplishing DLIs, stressing that it would “also ensure further disbursement of foreign exchange to the government.”
The funds required for completion of the DLIs for the current financial year are estimated at Rs3.86 billion. However, by curtailing its expenditures to some extent, the commission has planned to meet some of the DLIs by using Rs1.5 billion from its own resources, while the remaining amount has been requested from the government.
According to documents available with this scribe, the government had entered into a financing agreement with the IDA for a budgetary support credit facility of $400 million for the WB project. Of this amount, the association has already disbursed $55 million while further disbursement amounting to $273 million would be made after the completion of DLIs by HEC.
The DLIs were agreed to with the World Bank by HEC and the government. However, due to financial constraints, the allocation for HEC was not enhanced; rather it was decreased to Rs59.1 billion in FY20 as compared to Rs65 billion during FY19.
Therefore, HEC could not spare any amount for meeting the expenditure on achieving the DLIs during FY20.
In FY21, HEC demanded an amount of Rs104 billion under the current budget against which IBC of Rs70 billion was conveyed by the Finance Division, however, the allocation was further reduced to Rs64.1 billion in the federal budget 2020-2021.
