Disagree completely.
Even if now India has more money to improve Tejas, HAL will never be as good as US/Euro jets. So now India will spend the same budget from MMRCA program on Tejas which is inferior to anything from MMRCA. This is a clear win for Pakistan whichever way you look at it. Not only does Pakistan now save money by not having to counter MMRCA, but now India is competing directly in Light Combat Aircraft (LCA) arena where Tejas is just starting while JF17 is already in Block III and battle tested.
So now Pakistan effectively gets rid of MMRCA threat, IAF replaced US/Euro Jet with an inferior Tejas, and Pakistan saves money by not getting into a new arms race.
Maybe India would've been out of cash if they spent all their money buying foreign toys, but MMRCA was going to be a major issue for Pakistan, looks we dodged that bullet now.
Pakistan got 5 major victories from this announcement:
1. Western trust in Indian defense procurements is reduced
2. MMRCA threat is replaced with manageable Tejas
3. Tejas is unfinished direct competitor to JF17 while JF17 is already on Block III
4. Pakistan will have more JF17's than India will have Tejas since Pak had head start
5. Now Pakistan can focus on just JF17 and doesn't have urgent need to splurge on a new jet to counter MMRCA. If PAF does buy a new jet, it will give edge to PAF over IAF since MMRCA is now dead.