AMN / WEB DESK
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 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.
Beyond economic metrics, India has also pointed to broader governance issues in Pakistan, describing its current administrative and security approach as a serious and ongoing threat to peace and stability in South Asia. New Delhi has expressed particular concern over what it sees as Pakistan’s failure to demonstrate satisfactory progress in implementing key action items mandated by the Financial Action Task Force (FATF). These include investigating and prosecuting leaders of UN-designated terrorist organizations, as well as freezing and confiscating criminal assets associated with terror financing. The lack of tangible outcomes in these areas, India argues, raises red flags about Pakistan’s ability—or willingness—to meet international standards on transparency and accountability.
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.