India Strongly Opposes ADB Financing to Pakistan, Citing Fund Misuse Concerns
4 Jun 2025 5:12 PM IST
The protest of the government comes after ADB on Tuesday approved an $800 million programme to strengthen fiscal sustainability and improve public financial management in Pakistan
Ministry of Finance (X.com)
New Delhi: India is learnt to have vehemently opposed the decision of Asian Development Bank (ADB) to grant $800 million loan to Pakistan, saying that the fund could be misused for increasing expenditure on its military. The protest of the government comes after ADB on Tuesday approved an $800 million programme to strengthen fiscal sustainability and improve public financial management in Pakistan.
“Recently, India shared deep concerns regarding the potential misuse of ADB resources, particularly in light of Pakistan’s increasing defence expenditure, declining tax-to-GDP ratio, and the lack of demonstrable progress on key macroeconomic reforms. Keeping the development, the government has opposed granting such loans,” the sources privy to development said.
Earlier in the day, the Congress in a post on X quipped that Prime Minister Narendra Modi met ADB President Masato Kanda on June 1 and three days later ADB cleared the USD 800-million loan to Pakistan. The Modi government's influence did not work on the IMF earlier and Pakistan got a loan last month, the post said, adding that this happened even when the conflict between India and Pakistan was going on.
The sources further said that India expects the ADB management to adequately ring-fence the ADB financing, to prevent any such misuse. “Pakistan’s poor track record of implementation stems from the military's deeply entrenched interference in economic affairs, posing risks of policy slippages and reversal of reforms as has been witnessed in the past,” they said.
Pakistan’s policy of cross-border terrorism has led to a worsening of the security situation in the region and has significantly escalated macroeconomic risks for Pakistan, which also heightens the enterprise risks for the ADB. “India also highlighted that the economic fragility of the borrowing country (Pakistan) poses credit risks to the ADB too,” sources added.
“Recently, India shared deep concerns regarding the potential misuse of ADB resources, particularly in light of Pakistan’s increasing defence expenditure, declining tax-to-GDP ratio, and the lack of demonstrable progress on key macroeconomic reforms. Keeping the development, the government has opposed granting such loans,” the sources privy to development said.
Earlier in the day, the Congress in a post on X quipped that Prime Minister Narendra Modi met ADB President Masato Kanda on June 1 and three days later ADB cleared the USD 800-million loan to Pakistan. The Modi government's influence did not work on the IMF earlier and Pakistan got a loan last month, the post said, adding that this happened even when the conflict between India and Pakistan was going on.
The sources further said that India expects the ADB management to adequately ring-fence the ADB financing, to prevent any such misuse. “Pakistan’s poor track record of implementation stems from the military's deeply entrenched interference in economic affairs, posing risks of policy slippages and reversal of reforms as has been witnessed in the past,” they said.
Pakistan’s policy of cross-border terrorism has led to a worsening of the security situation in the region and has significantly escalated macroeconomic risks for Pakistan, which also heightens the enterprise risks for the ADB. “India also highlighted that the economic fragility of the borrowing country (Pakistan) poses credit risks to the ADB too,” sources added.
( Source : Deccan Chronicle )
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