By Admin 
India has raised a serious objection to the recently approved funding program by the Asian Development Bank (ADB) to Pakistan. India fears that this fund can be used in Pakistan’s increasing defense spending instead of development, especially when its economic condition is continuously weakening.
Pakistan’s defense budget is increasing continuously
Indian officials say that Tax-to-GDP Ratio of Pakistan is constantly falling, while its defense budget is increasing. In such a situation, the ‘Policy-Based Loans’ from external institutions like ADB can be misused. India clearly said that if the earlier ADB and IMF programs were successful, Pakistan would not have to take bailout package from IMF for the 24th time.
What is this new funding program?
ADB on June 3 approved a scheme called Improved Resource Mobilization and Utilization Reform Program- Subprogram 2 for Pakistan. Under this, a policy-based loan of $ 300 million and guarantee of $ 500 million, which can raise funds of up to $ 1 billion from commercial banks.
What did India say to ADB?
India has asked ADB to keep strict monitoring on the use of this fund. Pakistan’s economic weakness can also pose a risk for ADB. According to Indian sources, the deep intervention of the army in Pakistan affects changes in policies and speed of reforms. The army still has a great impact in economic matters.
India has said that Pakistan’s tax earnings were 13% in 2018, which declined to just 9.2% in 2023. Whereas in Asia-Pacific countries this average is 19%. Despite low income, Pakistan increased its defense spending in these years. India says that it is clear that Pakistan is not using its earnings properly.
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