The Asian Development Bank (ADB) has approved a significant financial package for Pakistan, comprising a USD 300 million policy-based loan (PBL) and a USD 500 million program-based guarantee (PBG). This despite concerns expressed by India, reports said.
The development comes a month after Pakistan secured a $1 billion (around Rs 8,500 crore) package from the International Monetary Fund (IMF).
Khurram Schehzad, advisor to the finance minister confirmed the development relating to the ADB package in a brief statement on social media, saying that the package includes a USD 300 million policy-based loan (PBL) and a USD 500 million programme-based guarantee (PBG).
The ADB package aims at bolstering Pakistan's fiscal sustainability and enhance public financial management through comprehensive reforms.
The PTI quoted ADB country director for Pakistan, Emma Fan as saying that Pakistan has made significant progress in improving macroeconomic conditions.
This programme, according to the news agency, backs the government's commitment to further policy and institutional reforms that will strengthen public finances and promote sustainable growth.
The programme supports far-reaching reforms to improve tax policy, administration, and compliance while enhancing public expenditure and cash management. It also promotes digitalisation, investment facilitation, and private sector development.
These measures aim to reduce Pakistan's fiscal deficit and public debt while creating space for social and development spending.
Quoting ministry officials, The Express Tribune newspaper reported that it aims to enhance domestic resource mobilisation and stabilise the economy through financial reforms.
The support will help improve the tax system, increase revenues, and promote fiscal discipline.
The programme is also expected to broaden the country's revenue base and marks a key step toward economic self-reliance.
Meanwhile, the Moneycontrol quoting sources said that “India shared deep concerns regarding the potential misuse of ADB resources, particularly in light of Pakistan’s increasing defence expenditure, its declining tax-to-GDP ratio, and the lack of demonstrable progress on key macroeconomic reforms.”
(With inputs from PTI)