The 'Digital Pakistan Policy' proposing several incentives, including 10 percent rebate, cash reward and special economic zones for information technology & enabled services' exports and growth, is waiting for the final nod of Prime Minister Shahid Khaqan Abbasi. The official sources revealed that Ministry of Information Technology and Telecommunication has revised and finalized the first-ever "Digital Pakistan Policy" draft and submitted it to the Prime Minister.
The Prime Minister had earlier raised several points including incentives as well as consultations with all the stakeholders. The ministry has proposed several incentives to increase the growth and exports of the IT sector. The sources said that final draft has been submitted to the Prime Minister who would either take a briefing or approve it for submitting before the cabinet.
However, it is feared that in case the incumbent government fails to approve the policy, it may be delayed for another around of one year, which would negatively affect the sector. The incentives to bolster growth include 100% equity ownership, 100% repatriation of capital/dividends, tax exemption on IT & ITES export revenues, tax exemptions to start-ups and subsidized state-of-the-art software technology parks.
The ministry had finalized the first-ever 'Digital Pakistan Policy 2017' sans any export target, implementation cost as well as revival plan for a sick Telephone Industry of Pakistan (TIP). The draft policy underscores the need for becoming a strategic enabler for an accelerated digitization ecosystem to expand the knowledge-based economy and spur socio-economic growth. The policy stated that all measures including legislative, policy, administrative and international marketing measures will be pursued to augment software exports, create jobs and contribute towards the government's efforts to increase overall IT exports and remittances.
However, the official sources told Business Recorder that the policy lacks any specific framework and exports target of IT&T enabled services to be achieved in the next three or five years. According to the key policy goals, a digital ecosystem with infrastructure and institutional frameworks would be created for rapid delivery of innovative digital services, applications and contents. Furthermore, state-of-the-art software technology parks (STPs) would be established in the federal and provincial capitals and a framework will be devised for development of STPs in secondary cities to provide relevant world-class data and network facilities to SMEs and MNCs.
The STPs will have built-in facilities for women and persons with disabilities (PWDs) as per international standards. Furthermore, national technology incubation centres across the country would be established. Software technology parks will also house an 'accelerator' and 'incubation centre' with attached investment fund to help entrepreneurs and emerging technology start-ups find stable support and access to the resources they need.
It would promote an open digitization infrastructure for shared services including cloud technologies to achieve synergies and economies of scale in both public and private sectors. The sources said all these measures involve huge financing but there is no mentioning about how the ministry would arrange finances for these projects.
The policy stated that local manufacturing of IT hardware (desktop PCs, laptops, mobile handsets, network equipment, LEDs, microprocessors, etc) would be promoted to augment measures already in place to incentivize local manufacturing of handsets, if so required. The management control of existing manufacturing concerns in the public sector may be transferred to the private sector through equity participation or long-term lease or any other public-private partnership mode. However, the policy has also not mentioned the revival of Telephone Industry of Pakistan (TIP).
TIP has become non-functional as its annual revenue has gone down drastically to about Rs 20 million from Rs 700 million in the recent past, officials sources revealed. TIP is a state-owned enterprise (SOE) currently running in losses and draining an average Rs 500 million a year for salary support. TIP has adequate land of 432 kanals and infrastructure, besides skilled manpower, but the government has failed to come up with any revitalization plan. It is currently on the privatization agenda of the federal government, the sources added.
The MoITT said that it will develop an action plan along with relevant ministries and departments detailing the timeframe and outputs of the digital policy. The ministry said that it plays the role of an enabler and facilitator to provide necessary guidance where required, while other federal ministries, divisions and departments will take the lead role for the implementation of policy strategy falling within their domain.