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Asian Development Bank: Functions and Assistance to India

28-MAY-2018 16:51

    Asian Development Bank Headoffice

    Asian Development Bank (ADB) was established on Dec.19, 1966. The aim of this bank is to accelerate economic and social development in Asia and pacific region. The bank started its functioning on January 1, 1967. Its headquarter is located at Manila, Philippines. Its chairmanship is always given to the Japanese and 3 deputy chairmen belong to USA, Europe and Asia. Current President of A.D.B. and the Chairperson of ADB's Board of Directors is Takehiko Nakao from Japan.

    Functions of Asian Development Bank (ADB)

    1. To make loans and equity investments for economic and social development of its developing members countries.

    2. To provide for technical assistance for the preparation and implementation of development projects and advisory services.

    3. To respond to the request for assistance in coordinating developmental policies and plans in developing member countries.

    4. This bank constituted Asian Development Fund in 1974, which provides loans to Asian countries on concessional interest rates.

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    As a multilateral development finance institution, ADB provides
    I. Loans

    II. Technical assistance

    III. Grants

    Its clients are our member governments, who are also our shareholders. In addition, we provide direct assistance to private enterprises of developing member countries through equity investments and loans.

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    ADB maximizes the development impact of its assistance by
    I. Facilitating policy dialogues,

    II. Providing advisory services, and

    III. Mobilizing financial resources through co-financing operations that tap official, commercial, and export credit sources.

    Areas of Focus and Results
    ADB operations are designed to support the three complementary agendas of inclusive economic growth, environmentally sustainable growth, and regional integration. ADB uses its scarce resources in the areas of comparative strength.

    Its key areas are as follows:
    I. Infrastructure (water, energy, transport, urban development, information and communications technology)

    II. Environment

    III. Regional cooperation and integration

    IV. Finance sector development

    V. Education

    VI. Health

    VII. Agriculture and natural resources

    VIII. Public sector management

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    What is the source of funding of Asian Development Bank

    ADB raises funds through bond issues on the world's capital markets. We also rely on our members' contributions, retained earnings from our lending operations, and the repayment of loans. It also provides loans and grants from a number of special funds.

    India’s subscription to the ADB’s capital stock was 7.090% with a voting power of 6.05% in 2010. In 2018 India’s share holding in ADB was 6.359% as against highest of Japan’s 15.677%.
    How much assistance does ADB provide?

    ADB operations reached an all-time high of $31.5 billion in 2016, a 17% increase from $26.9 billion in 2015. ADB's approvals of loans and grants for sovereign and non sovereign operations reached $17.5 billion - a 9% increase from $16.0 billion in 2015. Technical assistance increased by around 20% to $170 million from 2015’s $141 million figure.
    Asian Development Bank and India

    India started borrowing from ADB’s ordinary capital resources in 1986. A.D.B.’s lending to India has been mainly in energy, transport, communications, finance, industry, social urban infrastructure and agriculture and irrigation sector.
     ADB HELP TO INDIA
    Image source:SlideShare

    Recently on 31 March 2017 The Asian Development Bank (ADB) has approved the loan of $200 million to finance installation of millions of energy-efficient lights in streets and homes as well as energy-efficient water pumps across India. This deal will help to save energy savings of around 3,800 GigaWatt hours annually.

    The Asian Development Bank targets a poverty free Asia and Pacific region. Its mission is to help developing member countries in reducing poverty and improving the quality of life of their people. Despite the region's many successes, it remains home to a large share of the world's poor: 330 million living on less than $1.90 a day and 1.2 billion on less than $3.10 a day.

    So conclusively it can be said that the Asian Development Bank is playing a very crucial role in the infrastructural development projects launched by the government of India.

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