Pakistan’s repeated inability to meet International Monetary Fund (IMF) loan conditions has once again reinforced India’s long-standing concerns over Islamabad’s misuse of international financial aid. For the second review of its $7 billion bailout package, Pakistan failed to achieve three out of five IMF-set benchmarks.

According to Pakistan’s Express Tribune, the Federal Board of Revenue fell short of collecting PKR 12.3 trillion in revenues and failed to generate PKR 50 billion through the “Tajir Dost” scheme aimed at taxing retailers, leaving much of the informal economy untaxed. Additionally, provincial governments failed to save the targeted PKR 1.2 trillion due to higher spending.

India has consistently opposed IMF and other multilateral loans to Pakistan, arguing that such funds risk being diverted toward military expansion and cross-border terrorism. Parameswaran Iyer, India’s IMF representative, stressed the need for global lenders to consider moral implications in their procedures, not just technical criteria.

Since last September, when the IMF approved a 37-month Extended Fund Facility for Pakistan worth about $7 billion, Islamabad’s track record of reforms has remained poor. Analysts note that repeated bailouts suggest either flaws in IMF programme design or persistent non-compliance by Pakistan.

The military’s entrenched influence in Pakistan’s economy compounds these challenges. A 2021 UN report described army-linked businesses as the country’s largest conglomerate—a dominance that has only deepened, with the military now spearheading the Special Investment Facilitation Council.

India has also cited an IMF evaluation noting perceptions that political considerations shape IMF lending to Pakistan. The result is a heavy debt burden that paradoxically makes Pakistan a “too-big-to-fail” borrower, locking the IMF into repeated rescue cycles.