I've never heard it personally, except to refer to those helicopters that observe traffic at rush hour and transmit the information to radio stations for the benefit of commuters. I'd assume without more context that it refers to the Almighty, Whose eye, we are told, is on the sparrow.
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In that context the usage of Pie in the Sky is a reference to ***, the Almighty. It is also used to describe surveillance cameras, Police and Traffic helicopters. It's also used for the latest device, drones.