Why is it in the News?

The Asian Development Bank (ADB) recently raised its forecast for India’s GDP growth in the current fiscal year ending on March 31, 2025, to 7%, from 6.7% earlier, citing robust public and private investment as well as expectations of a gradual improvement in consumer demand as the rural economy recovers.

What is the Asian Development Bank?

• The Asian Development Bank (ADB) is a global development finance agency whose aim is to help developing member countries in reducing poverty and improving people’s quality of life.
• It came into existence in 1966 and it is headquartered in Manila, Philippines.
• It aids in pushing social and economic development by providing loans, technical assistance, grants, and equity investments.
• ADB is owned and financed by its 68 members, 49 of whom are from the Asia-Pacific region.
• ADB’s key partners are governments, the commercial sector, non-government organizations, development agencies, community-based groups, and foundations.
  • ADB will follow three complementing strategic agendas: inclusive growth, ecologically sustainable growth, and regional integration, as outlined in Strategy 2020, a long-term strategic framework approved in 2008.
• The major objective of the Asian Development Bank is to ensure market prosperity and enhance collaboration among Asia-Pacific countries.
• The ADB oversees significant projects within the region and sometimes raises funding through international bond markets.
• To promote development, the Asian Development Bank provides grants, loans, technical support, and equity investments to its developing member nations, the private sector, and public-private partnerships.
• They also use co-financing activities to supply support while tapping official, commercial, and export finance sources.
  • Members and associate members of the international organization Economic Commission for Asia and the Far East are eligible to affix the ADB.
• Other regional and non-regional developed countries that are members of the United Nations or any of its specialized agencies are eligible.

Who Controls the Asian Development Bank?

• The ADB is run by a board of governors, which represents the member countries of the ADB.
• As of 2022, ADB's five largest shareholders are Japan and the United States (each with 15.6% of total shares), the People's Republic of China (6.4%), India (6.3%), and Australia (5.8%).

Funding Sources:

• The ADB sustains its operations through various channels, including member contributions, earnings from lending activities, and the repayment of loans.

Why in the News?

The central government recently signed a USD 400 million policy-based loan with the Manila-based Asian Development Bank (ADB) to support its urban reform agenda to create high-quality urban infrastructure, improve service delivery, and promote efficient governance systems.

About Asian Development Bank (ADB):

• The Asian Development Bank (ADB) is a regional development bank headquartered in Manila, Philippines.
• It was established in 1966 to promote economic development and cooperation in Asia and the Pacific.
• The ADB's primary goal is to reduce poverty in its member countries.
• The bank provides loans, grants, technical assistance, and policy advice to its member countries.
• It also mobilizes private sector investment through its private sector arm, the Asian Development Bank Private Sector Operations.
• It has 68 member countries, including 49 countries in Asia and the Pacific, and 19 non-regional developed countries.
• The ADB's annual lending volume is around $32 billion.
• As of 2022, ADB's five largest shareholders are Japan and the United States (each with 15.6% of total shares), the People's Republic of China (6.4%), India (6.3%), and Australia (5.8%).
• Source of Funding: It relies on member contributions, retained earnings from lending, and the repayment of loans for the funding of the organization.

The bank's strategy is focused on four key areas:

• Promoting sustainable growth: The ADB is committed to supporting its member countries in achieving their sustainable development goals by financing infrastructure, clean energy, and climate change mitigation and adaptation projects.
• Tackling poverty and inequality: The ADB is providing financing for education, health, social protection, and other programs that benefit the poor and vulnerable to reduce poverty and inequality in its member countries.
• Strengthening regional cooperation: The ADB is promoting regional cooperation and integration in Asia and the Pacific.
• The bank is supporting its member countries in developing regional infrastructure, trade, and investment projects.
• Responding to crises and disasters: The ADB is helping its member countries prepare for and respond to crises and disasters by providing finances for disaster risk reduction and resilience projects.