Multilateral bank lending must ensure funds are used for intended purposes: FM Sitharaman
Ms. Sitharaman's comment was part of her statement at the 4th International Conference on Financing for Development in Seville, Spain. It comes soon after India lobbied both the International Monetary Fund (IMF) and the Asian Development Bank (ADB) to review their funding of Pakistan, as such loans were allegedly channelled towards increased military expenditure rather than towards developmental purposes.
'India supports reforms to the international financial architecture to enhance inclusivity and equity, including MDB reforms and fairer credit rating systems,' Ms. Sitharaman said. 'MDB lending must be aligned with long-term development goals and backed by robust monitoring frameworks to ensure that funds are used as intended,' she added.
The Hindu had reported in May about how Ms. Sitharaman had called the IMF managing director Kristalina Georgieva to sensitise her to the issue that, while India was not against funding for developmental purposes, 'the timing for such funding was not right due to the border tensions' between India and Pakistan.
In June, The Hindu further reported that India had 'vehemently opposed' the ADB's latest decision to provide additional funding to Pakistan, saying the country's increased military spending could not fully be explained through domestic resource mobilisation.
'India's progress across all action areas of the Compromiso de Sevilla demonstrates that developing countries can be both beneficiaries and drivers of global development finance,' Ms. Sitharaman said in her statement.
'India stands ready to lead by example, share its experiences, and collaborate with partners in advancing this agenda,' she added.
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