The army top brass now leads the Special Investment Facilitation Council, which gives it more control over the economic policy.
New Delhi: India has expressed strong reservations over the Asian Development Bank’s (ADB) approval of an $800 million aid package to Pakistan, citing serious concerns about the potential misuse of funds. According to official sources, New Delhi fears the aid could be diverted towards defence spending rather than addressing the country’s deepening economic crisis.
India has highlighted that despite facing a deteriorating fiscal situation, Islamabad continues to ramp up defence expenditure. The military, which now holds significant sway over Pakistan’s economic policy through its leadership of the Special Investment Facilitation Council (SIFC), effectively controls key government decisions, raising red flags over transparency and accountability.
Sources in the Indian government have pointed out that this growing military influence poses a significant risk of policy reversal and weak reform implementation, especially in light of Pakistan’s history of economic mismanagement.
Pakistan’s economic indicators remain bleak: the tax-to-GDP ratio is shrinking, foreign exchange reserves are critically low, and inflation remains in double digits. Despite these alarming trends, defence allocations have increased. India sees this as a misallocation of resources, particularly when coupled with recent defence acquisitions such as Chinese fighter jets and an expanded drone fleet—developments observed after India’s Operation Sindoor.
India has also flagged Pakistan’s poor record in implementing economic reforms required by multilateral aid institutions like the ADB and IMF. Noting that Pakistan recently sought its 24th bailout from the IMF, Indian officials say this points to continued policy inefficiencies and the failure of previous international assistance to bring about long-term macroeconomic stability.
Another point of concern for India is Pakistan’s ongoing support for cross-border terrorism, which undermines regional security. India has stressed that this behavior further complicates the justification for international financial support.
India also criticized Pakistan’s weak track record in meeting the Financial Action Task Force (FATF) guidelines, particularly with regard to investigating and prosecuting UN-designated terrorist leaders and freezing their assets. According to Indian officials, Pakistan’s inconsistent actions on terror financing remain a major stumbling block in fostering regional peace and trust.
New Delhi’s message is clear: unless there is tangible progress in economic reforms, demilitarization of policy decisions, and crackdown on terrorism, continued financial assistance to Pakistan by global institutions like the ADB may do more harm than good.
