India Red-Flags $800 Million Asian Development Bank Aid Package To Pakistan
India has expressed deep concerns over the potential misuse of the $800 million ADB aid package to Pakistan as the country is increasing its defence expenditure, despite the poor fiscal position.
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Tax-to-GDP ratio in Pakistan continues to decline (Representational)
New Delhi:
India has raised significant concerns regarding the potential misappropriation of the $800 million Asian Development Bank aid package to Pakistan, noting that the country is expanding its defense budget despite facing severe economic challenges. With the military effectively controlling the Islamabad government, this situation raises serious questions.
The military leadership now heads the Special Investment Facilitation Council, granting them enhanced influence over economic decisions. According to reliable sources, India has cautioned that this deepening military involvement creates substantial risks for policy consistency and undermines reform implementation efforts.
Pakistan is currently experiencing an economic crisis characterized by dwindling foreign exchange reserves and double-digit inflation rates, alongside a decreasing tax-to-GDP ratio. Nevertheless, the military-influenced government continues to prioritize defense spending despite these financial difficulties.
India has also highlighted Pakistan's consistently poor performance in implementing economic reforms that are required conditions for financial assistance from international lending institutions.
A key worry for India is the potential diversion of these funds toward military expenditures. An official noted that Pakistan's acquisition of Chinese fighter jets and numerous drones deployed during Operation Sindoor demonstrates their increasing investment in military hardware.
India pointed out that Pakistan recently sought its 24th bailout from the International Monetary Fund, demonstrating policy failures. This pattern suggests that previous programs supported by the ADB and IMF have been ineffective in establishing sustainable economic stability.
Additionally, India emphasized that Pakistan's support for cross-border terrorism has contributed to regional security deterioration.
India further noted that Islamabad's compliance with Financial Action Task Force requirements regarding terrorist financing investigations, prosecution of leaders of UN-designated terrorist organizations, and the freezing and confiscation of criminal assets remains highly inadequate.