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IMF's $1B Pakistan bailout sparks anger in India
10 May 2025

India's abstention from the recent International Monetary Fund (IMF) vote has been noted amid concerns and criticism in India regarding the IMF's decision.

The IMF approved a $1 billion bailout for Pakistan under the Extended Fund Facility (EFF), taking total support under it to $2.1 billion.

This move has raised concerns in India about potential misuse of funds for financing cross-border terrorism, amid escalated tensions between both nations.

IMF's financial aid to Pakistan under scrutiny
Aid details

The IMF board also approved Pakistan's request for $1.4bn more under the Resilience and Sustainability Facility (RSF).

The comprehensive $2.4bn package seeks to address Pakistan's balance of payment issues while enhancing long-term resilience to climate and pandemic risks.

However, India has questioned the effectiveness of such financial assistance, pointing out that Pakistan has been supported in 28 years out of the last 35, without meaningful or lasting reform.

India's concerns over Pakistan's military influence on economy
Military influence

India has raised concerns about the Pakistani army's continued involvement in economic matters, which hampers transparency and civilian oversight.

Despite a civilian government in power, India says the Pakistan army still has a say in domestic politics and is deeply embedded in the country's economy.

A 2021 UN report termed military-linked businesses "the largest conglomerate in Pakistan," further fueling India's reservations about the IMF aid package.

Jammu and Kashmir CM criticizes IMF for bailing out Pakistan
Official criticism

Jammu and Kashmir Chief Minister Omar Abdullah criticized the IMF for bailing out Pakistan through loans, on X (formerly Twitter).

He asked how the "international community" expects tension in the subcontinent to de-escalate when the IMF basically reimburses Pakistan for its military actions.

Abdullah's comments highlight India's deep concerns over the potential misuse of funds by Pakistan amid ongoing regional tensions.

IMF defends its decision to support Pakistan
IMF's stance

Defending its decision, IMF said Pakistan's policy efforts under the EFF have already made significant progress in stabilizing the economy and rebuilding confidence amid a challenging global environment.

The fund highlighted strong fiscal performance with a primary surplus of 2% of GDP achieved in the first half of FY25, keeping Pakistan on track to meet its end-FY25 target.