Staff Reporter
India has raised strong concerns with the Asian Development Bank (ADB) regarding the potential misuse of financial assistance provided to Pakistan, cautioning that such resources could be diverted away from development objectives and used in ways that undermine regional stability. According to reliable sources, New Delhi has conveyed its reservations to the ADB, emphasizing the growing risk that international funds, if not carefully monitored, could be misallocated by Islamabad—particularly in view of the country’s rising defense expenditure, deteriorating fiscal indicators, and lack of progress on crucial macroeconomic reforms.
One of India’s key arguments centers around Pakistan’s declining tax-to-GDP ratio, which has dropped significantly from 13.0 percent in the financial year 2018 to just 9.2 percent in FY 2023. This reduction in domestic revenue generation, India argues, reflects a weakening of the state’s financial discipline and a limited commitment to structural economic reforms. In such a scenario, India has warned, development loans or grants might not be effectively utilized for the intended purposes of poverty alleviation, infrastructure improvement, or institutional strengthening.
The Indian government’s communication to the ADB comes at a time when multilateral financial institutions are facing increasing scrutiny over their lending decisions, especially in geopolitically sensitive regions. India’s caution aims to prompt the bank to exercise greater due diligence and ensure that any financial support to Pakistan is coupled with strict conditions, oversight, and performance benchmarks. According to Indian officials, this is not merely a bilateral issue but a matter of ensuring that global development funds are not misused in ways that could potentially fuel conflict, instability, or the enabling of extremist elements.
