Indian Defence Minister Rajnath Singh said on Friday the International Monetary Fund (IMF) should reconsider a one billion US dollar loan to Pakistan, alleging it was "funding terror," a move denounced by Islamabad as proof of New Delhi's desperation.

India and Pakistan last week clashed in the worst military violence in decades, killing around 70 people before agreeing to a ceasefire that began on Saturday.

The confrontations were sparked by an attack on tourists by gunmen in Indian-administered Kashmir last month that New Delhi accused Islamabad of backing – a charge it denies.

"I believe a big portion of the US$1 billion coming from the IMF will be used for funding terror infrastructure," Singh told troops at an air force base in western India.

"I believe any economic assistance to Pakistan is nothing less than funding terror."

Despite India's objections, the IMF last week approved a loan programme review for Pakistan, unlocking a US$1 billion payment which the state bank said has already been received.

A fresh US$1.4 billion loan was also approved under the IMF's climate resilience fund.

India – which also represents Bhutan, Sri Lanka, and Bangladesh on the IMF board – abstained from the review vote, with a statement from its finance ministry stating, "concerns over the efficacy of IMF programmes in the case of Pakistan, given its poor track record." (AFP)