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Key Points

India has expressed gratitude for the IMF’s strict conditions on Pakistan’s bailout but raised concerns over its timing, fearing funds may fuel defence spending. Officials highlight Pakistan’s disproportionate military budget compared to conflict-affected nations. Indian delegations are actively exposing Pakistan’s terror links globally. The IMF warns escalating Indo-Pak tensions could derail Pakistan’s fiscal reforms.

Key Points: India Questions IMF Bailout Timing as Pakistan Defence Spending Rises

  • India questions IMF bailout timing amid Pakistan’s rising defence budget
  • IMF imposes 11 new conditions on Pakistan
  • Multi-party delegations expose Pakistan’s terror links
  • IMF warns Indo-Pak tensions risk fiscal reform goals
3 min read

India thanks IMF for imposing 11 conditions on Pakistan, but questions timing of bailout: Sources

India thanks IMF for Pakistan bailout conditions but raises concerns over timing and defence spending surge amid tensions.

"All these arms and ammunition are then used by Pakistan against India – Government Sources"

New Delhi, May 23

India has said it is "thankful" for the 11 additional conditions imposed by the International Monetary Fund (IMF) on Pakistan, while clarifying that it is not opposed to financial assistance meant for genuine developmental purposes. At the same time, it raised serious concerns over the timing of the recent bailout package, suggesting that the funds may have indirectly supported Pakistan's rising defence spending.

"We are thankful for the additional 11 conditions imposed by the IMF on Pakistan. However, we are not against any financial assistance provided for genuine developmental agendas. We have raised questions regarding the timing of the recent bailout package given to Pakistan by the IMF," government sources said.

"All these arms and ammunition are then used by Pakistan against India," the sources added, citing IMF data.

Sources, also citing public data, told ANI that, "Pakistan spends on average around 18 per cent of its general budget on defence affairs and services, while even conflict-affected countries spend far less, averaging 10-14 per cent of their general budget expenditure. Furthermore, Pakistan's arms imports increased dramatically from 1980 to 2023, by over 20 per cent on average in the years when it received IMF disbursements compared to years when it did not."

Meanwhile, Indian multi-party delegations are visiting various countries to expose Pakistan's support for terrorism and highlight India's zero-tolerance policy towards it.

According to a report by Pakistan-based Express Tribune, the IMF has placed 11 new conditions on Pakistan for the release of the next tranche of the bailout package meant for its struggling economy.

The IMF staff report, released on Saturday, warned, "Rising tensions between India and Pakistan, if sustained or deteriorate further, could heighten risks to the fiscal, external and reform goals of the programme." It added that overall risks to the programme had increased.

Among the conditions is the approval of a Rs 17.6 trillion budget for the financial year 2025-26, in line with IMF targets. Another condition asks Pakistan to implement new Agriculture Income Tax laws. This includes setting up systems for return filing, taxpayer registration, communication efforts, and a compliance plan. The deadline for this is June 2025.

A third condition requires the publication of a governance action plan based on the IMF's Governance Diagnostic Assessment.

The IMF also wants Pakistan to prepare and publish a financial sector strategy for the period after 2027, outlining its institutional and regulatory plans from 2028 onwards.

On May 9, the IMF completed its review of the USD 1 billion Extended Fund Facility (EFF) and also considered a new USD 1.3 billion Resilience and Sustainability Facility (RSF). This brings total disbursements under the USD seven billion programme to USD two billion so far.

- ANI

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Reader Comments

R
Rajiv K.
Finally some accountability! Pakistan has been using foreign aid to fund terrorism against India for decades. IMF conditions are a good start but we need stronger global action. Hope they actually implement these reforms instead of finding loopholes like before.
P
Priya M.
While I understand the concerns, we must remember ordinary Pakistanis suffer due to their military's obsession with India. The agriculture tax reforms could help their farmers if implemented properly. Hope this leads to better relations eventually 🤞
A
Arjun S.
IMF data proves what we've been saying for years - Pakistan diverts funds to military instead of development. 18% on defense when their people lack basic needs? Shameful! India should push for even stricter monitoring of how bailout money is spent.
S
Sunita R.
The timing is indeed suspicious. Every time Pakistan gets money, we see increased infiltration attempts at the border. IMF should make counter-terrorism compliance a mandatory condition. Enough is enough!
V
Vikram J.
While I support India's stance, we must be careful not to appear like we're interfering in IMF matters. Our focus should be on strengthening our own economy and security. Actions speak louder than statements when it comes to dealing with Pakistan.
N
Neha P.
Interesting that IMF itself acknowledges Pak-India tensions affect their economy. Maybe this will make them think twice before provoking border conflicts? One can hope... Meanwhile, kudos to our diplomats for exposing their terror links globally 👏

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