Defense Minister Rajnath Singh has issued a strong warning regarding Pakistan's alleged plans to utilize taxpayer money to support terrorist activities, including providing significant financial assistance to Masood Azhar, the leader of the banned Jaish-e-Mohammed (JeM). Singh stated that Pakistan intends to allocate ₹14 crore to Azhar, who is designated as an international terrorist by the United Nations. JeM has been implicated in several attacks, including the 2019 Pulwama and 2016 Uri attacks in India.

Singh's warning comes in the context of heightened tensions and recent military actions between India and Pakistan. He claimed that Pakistan has initiated the rebuilding of terrorist infrastructure that was previously destroyed by India during Operation Sindoor, which was India's response to the April 22 Pahalgam terror attack perpetrated by Lashkar-e-Taiba, another Pakistan-based terror group.

The Defence Minister also voiced concerns that the Pakistani government would divert a substantial portion of the $2.1 billion aid package it is expected to receive from the International Monetary Fund (IMF) to fund these activities. Singh stated that Pakistan would use tax money collected from its citizens to provide ₹14 crore to Masood Azhar, despite his designation as a UN-sanctioned terrorist. He further added that the Pakistani government has expressed its intention to provide financial aid to rebuild the terror infrastructure of Lashkar-e-Taiba and Jaish-e-Mohammed in Muridke and Bahawalpur.

Rajnath Singh has strongly criticized the IMF's decision to provide financial assistance to Pakistan, calling it "indirect funding to terror". He urged the IMF to reconsider the bailout, emphasizing the risk that the funds could be used to support terrorist organizations operating from Pakistani soil. He highlighted reports indicating Pakistan's plans to compensate Masood Azhar and warned that a significant portion of the IMF funds would likely be used to bolster terror infrastructure.

These statements were made during a period of increased military activity and heightened tensions between the two countries. India and Pakistan had agreed to extend a ceasefire until May 18, but the agreement was reportedly violated by Pakistan shortly after it was implemented. In early May 2025, India launched Operation Sindoor to target terror bases in Pakistan and Pakistan-Occupied Kashmir, leading to strikes and counter-strikes between the two nations. Amidst these developments, Singh's remarks underscore India's concerns regarding Pakistan's support for terrorism and the potential misuse of international aid.

India has been raising red flags concerning IMF bailouts to Pakistan, particularly in light of Pakistan's history with terror financing. Although Pakistan was removed from the Financial Action Task Force's (FATF) "grey list" in 2022, concerns persist regarding the country's commitment to preventing terror financing and money laundering.