India has sharply criticised the Asian Development Bank’s (ADB) approval of an $800 million financing package for Pakistan, expressing “vehement opposition” to any form of financial support for its neighbour.Indian government sources voiced “deep concerns” over the potential misuse of ADB resources, citing Pakistan’s rising defense expenditure, a declining tax-to-GDP ratio, and the lack of tangible progress on key macroeconomic reforms.
The ADB on June 3 approved the package under its Improved Resource Mobilization and Utilization Reform Program, Subprogram 2, which includes a $300 million policy-based loan and the bank’s first-ever policy-based guarantee of up to $500 million. The guarantee is expected to mobilise additional commercial financing for Pakistan.
Despite India’s objections, the ADB defended the program, saying it supports comprehensive reforms in Pakistan’s tax policy, administration, and public expenditure management.The initiative also aims to improve digitalisation, investment facilitation, and private sector development, with the broader goal of reducing fiscal deficits and public debt while enabling greater spending on social and development priorities.
The ADB on June 3 approved the package under its Improved Resource Mobilization and Utilization Reform Program, Subprogram 2, which includes a $300 million policy-based loan and the bank’s first-ever policy-based guarantee of up to $500 million. The guarantee is expected to mobilise additional commercial financing for Pakistan.
Despite India’s objections, the ADB defended the program, saying it supports comprehensive reforms in Pakistan’s tax policy, administration, and public expenditure management.The initiative also aims to improve digitalisation, investment facilitation, and private sector development, with the broader goal of reducing fiscal deficits and public debt while enabling greater spending on social and development priorities.
Pakistan, a founding member of the ADB, has received over $52 billion in loans, grants, and other financing support from the bank since 1966.
(Edited by : Ajay Vaishnav)
