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A senior official in the Prime Minister's Office (PMO) visited Washington 10 days ago to discuss with the International Monetary Fund (IMF) and the United States government the ongoing loan programme for Pakistan.

N K Singh, secretary in the PMO, was chosen for the secret mission for his network of contacts in the multilateral bodies. The initiative was taken at the behest of Brajesh Mishra, principal secretary to the Prime Minister.

Finance ministry officials said the mission was part of the government's economic offensive against Pa-kistan following its violation of the Line of Control in Kargil. The visit coincided with political commentator R K Mishra's discussions with former Pakistani foreign secretary Niaz Naik, Pakistan Prime Minister Nawaz Sharif's back-channel emissary.

The officials said the economic diplomacy initiative was aimed at ensuring a back-up measure in case of an about-turn in the US stand. "At least, the IMF can pressure Pakistan for transparency in its defence spending," the officials said.

The thrust of the PMO's move was to convince the lending agency to scrutinise Pakistan's commitments, especially on defence and social sector spendings, while taking recourse to the $1.5 billion loan in 1997.

India has appealed to the IMF to focus on Pakistan's increased def-ence spending and neglect of the social sector while negotiating the new $5.5-billion loan later this month, the officials said. The terms of the loans are expe-cted to incorporate a $3.5-billion debt rescheduling. In Washington, Singh met IMF managing director Michel Camdessus and former World Bank economist and US treasury secretary Larry Sum-mers. At his meeting with Camdessus, Singh pointed out Pakistan's failure to adhere to the conditionalities of the loan programme.

He also drew attention to Pakistan's budget presented on June 22. The budget saw an 11 per cent hike in defence expenditure over the previous year,

while social sector spending was pruned considerably. India cited the apprehensions expressed by several institutional investors in this regard. Some of them have stressed the need to ensure transparency in the conditionalities imposed by the IMF before the approval of the loan. "Transparency is vital so that it is apparent when conditionality is being breached, (and) at which point IMF funds should be withdrawn. This is what international private investors expect from the world's financial policeman. If this threat is not credible, there will be minimal progress on fiscal reforms and economic restructuring.

The Indian government has already indicated that unlike last time, it will question, through the offices of its executive director on the IMF board, all future loans provided to Pakistan. The present executive director, M R Sivaraman, will soon be replaced by finance secretary Vijay Kelkar.

Fiscal Assault