The Asian Development Bank (ADB) has raised its forecast for India’s growth in 2021-22 to 11%, from 8% earlier, even as it warned that failure to control the resurgence of COVID-19 cases including April’s exponential jump poses a “considerable downside risk to the recovery”.
GS-III: Indian Economy (Economic Growth and Development, Important International Organizations)
Dimensions of the Article:
- About Asian Development Bank (ADB)
- About the recent assessment of the ADB
About Asian Development Bank (ADB)
- The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966 to promote social and economic development in Asia.
- It is headquartered in the city of Mandaluyong, Metro Manila, Philippines.
- The ADB was modeled closely on the World Bank and an official United Nations Observer.
- Japan holds the largest proportion of shares in ADB followed by the USA, and it has a weighted voting system where votes are distributed in proportion with members’ capital subscriptions (just like the World Bank).
- The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP, formerly the Economic Commission for Asia and the Far East or ECAFE) and non-regional developed countries.
- ADB defines itself as a social development organization that is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.
- ADB aids in reducing poverty through investments in the form of loans, grants and information sharing (in infrastructure, health care services, financial and public administration systems), helping nations prepare for the impact of climate change or better manage their natural resources, as well as other areas.
- ADB is an official United Nations Observer.
- India was a founding member of the Asian Development Bank (ADB) in 1966 and is now the bank’s fourth largest shareholder and top borrower.
About the recent assessment of the ADB
- The ADB cited 2021’s ‘more targeted’ containment measures compared with 2020’s ‘large-scale’ national lockdown and said these would prove ‘less costly’ to the economy.
- A stimulus-fuelled surge in the U.S., India’s largest export market, will support the revival, but a severe second COVID-19 wave is threatening the recovery.
- Asian Development Outlook report projected Indian Economy’s growth to moderate to 7% in 2022-23, after a 11% expansion this year.
- ADB sees India’s average inflation rate slowing to 5.2% this year from 6.2% last fiscal, and reverting to 4.8% (recorded in 2019-20), over the succeeding 12 months.
-Source: The Hindu