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Informist, Friday, May 23, 2025

 

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--Govt source: Don't see any econ impact from recent India-Pakistan conflict 
--Govt source: India FY26 defence Budget enough to address Pakistan conflict 
--Govt source: Don't see additional need to raise FY26 defence allocation 
--Govt source: Gave defence forces free hand to buy arms 
--Govt source: Pushing multilateral agencies to stop funding to Pakistan 
--Govt source: To push Fincl Action Task Force to grey-list Pak at next meet

 

NEW DELHI – The Indian government will push to include Pakistan again in the grey list of the Financial Action Task Force at the next meeting of the global money laundering and terrorist financing watchdog, a government source said. The Financial Action Task Force excluded Pakistan from the list of countries under increased monitoring or grey list in October 2022. The Financial Action Task Force is likely to meet next in June.  

 

The source said that India has also conveyed to the International Monetary Fund that Pakistan has been using the funds released for arms and ammunition procurement. The authorities also told the IMF that Islamabad's military procurement went up every time multilateral agencies released aid to it. The Indian government has also requested the western countries to withhold aid to Pakistan in view of border tensions, the source said.

 

Due to the consistent push by the Indian government, the IMF has imposed additional conditions on Pakistan, asking it to show its budgetary allocations, the source said.

 

Tensions escalated between India and Pakistan after Pakistan-based terrorists killed 26 people, mainly tourists, in Jammu and Kashmir's Pahalgam on Apr. 22. India launched Operation Sindoor in retaliation to Pahalgam attack on May 7 and destroyed terrorist camps at nine locations in Pakistan and Pakistan occupied Kashmir. This resulted in counter action by Pakistan. Both the sides arrived at an understanding to stop firing and military actions on May 10.

 

The government has also given defence forces a free hand to buy arms, the source said, adding that the FY26 defence budget is enough to address the situation arising because of the conflict with Pakistan. The government doesn't see a need to raise FY26 defence allocation, the source said, adding the recent India-Pakistan conflict won't have any impact on economic growth.

 

On May 9, the International Monetary Fund approved Pakistan's economic reform programme, which allowed immediate disbursement of around $1 billion loan to Islamabad. In addition, the IMF's executive board also approved the request for an arrangement under the Resilience and Sustainability Facility, with access of about $1.4 billion. India raised concern over the efficacy of IMF programmes in case of Pakistan, given its poor track record, and also on the possibility of misuse of debt financing funds for state sponsored cross-border terrorism. India abstained from the voting during the IMF executive board meeting.  End

 

Reported by Priyasmita Dutta and Kuldeep Singh

Edited by Akul Nishant Akhoury

 

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