Washington: US President Donald Trump wants to convert American grant to Pakistan for purchase of military hardware into a loan, the White House has said. Mr Trump in his annual budget to the Congress proposed the grant conversion, it said.
The Trump administration, however, has left it for the State Department to take a final call.
Unlike parliamentary democracies like India and the UK, where the finance minister delivers the budget speech on the floor of the parliament, in the US the White House sends copies of the president's budget proposals.
The maiden annual budget of the Trump administration will be submitted to the US Congress later today.
The Trump administration has proposed to convert its Foreign Military Funding or FMF programme to many countries, including Pakistan, from aid to financial loan, said Mick Mulvaney, Director of the Office of Management of Budget in the White House. "The Foreign Military Funding for Pakistan may be provided in the form of a loan," Mr Mulvaney said.
"This is one of the options that the administration had explored in its internal deliberations, but the request itself does not make that determination," the White House later clarified, indicating that it might revert to the original financial grant to Pakistan to sell military hardware.
Whether the funding is through grants, or as a subsidy for a guaranteed loan, the State Department can choose any option to ensure American foreign assistance best supports its national interests, the White House said.
The Trump administration is said to be cutting foreign aid budgets to help pay for increased US military spending. However, for Israel and Egypt, American military aid would continue to be in the form of grant, Mr Mulvaney said.
The details of the Foreign Military Funding programme to Pakistan and other countries are expected to be released by the State Department later.
"We do maintain aid to Pakistan in the budget. I don't believe it's at the same levels as previous," Mr Mulvaney said. "We do change a couple of foreign military programmes from direct grants to loans. Our argument was instead of giving somebody $100 million, we can give them a smaller number worth of loan guarantees and they can actually buy more stuff. We did not change it for Israel. We did not change it for Egypt," Mr Mulvaney said.