India opposes ADB move to grant $800 million loan to Pakistan

India shared deep concerns regarding the potential misuse of ADB resources, particularly in light of Pakistan’s increasing defence expenditure, its declining tax-to-GDP ratio, and the lack of demonstrable progress on key macroeconomic reforms, they said requesting anonymity.

India’s strong opposition against ADB’s financial aid to Pakistan came almost a month after New Delhi protested the International Monetary Fund (IMF)’s decision to provide a $2.3 billion bailout package to Islamabad, which saw IMF imposing about a dozen stringent conditions attached with the credit facility, making diversion of funds almost impossible.

According to a PTI report from Islamabad on Tuesday, ADB approved a $800 million loan to Pakistan for strengthening its fiscal sustainability and improving its public financial management. The credit package included a $300 million policy-based loan (PBL) and a $500 million programme-based guarantee (PBG), the report said.