What is ADB/And the impact of ADB on India
The Asian Development Bank has been making useful contribution in financing development projects and programmes related to private and public sectors in the developing countries of Asia. Prior to 1986, India made no borrowings from the ADB. The loan authorisation to India during 1986-87 was 251.6 million U.S. dollars which rose to $649.8 million in 1991-92.
The gross inflow of assistance in 1991-92 included 150 million U.S. dollars for Special Assistance Project and 125 million U.S. dollars as the first tranche of the hydro-carbon loan sector. In 1997-98, loan authorisation from ADB amounted to 650 million dollars while it stood at 630 million dollars in 1996-97.
The utilisation of assistance from the ADB was, however, woefully small during 1987-90 period. It amounted to only 153.2 million U.S. dollars which was just 10.55 percent of aid authorisation from the ADB in that period. The utilization of ADB assistance in 1997-98 amounted to 601.1 million U.S. dollars which was only 92.3 percent of the authorised assistance.
Despite the sanctions imposed by Group of Seven (G-7) industrialised countries after Atomic Tests in May 1998, ADB has approved three loans amounting to $ 625 million to India. One of these loans is a $ 250 million. programme loan of which $ 100 million have already been released by the ADB. During 1996-99 period, ADB loan disbursement to India was over $ 600 million a year. In 1998, it was 32 percent, higher than the disbursement ratio of China During 1999-2002 period, total authorisation of assistance by ADB to this country amounted to $ 3.04 billion. The utilisation of ADB assistance was, however, only $ 1.47 billion. The ADB assistance authorised to India during 2003-09 period amounted to US $ 8. 48 billion. During the same period the ADB assistance actually utilised by the country was of the order of US $5.37 billion which was 63.3 percent of the authorised assistance. The efforts must be directed to improve the extent of utilisation of assistance secured from the ADB.
The ADB authorised loan assistance amounting US $ 565.2 million in 2010-11. ADB’s three year country operations business plan for India for 2012-14 will provide lending assistance of US $ 6.25 billion to support
inclusive growth. The lending support will go to key areas like transport, energy, urban development, agriculture, natural resource management, finance and education. In 2014-15, the ADB authorised loan assistance amounting to US $ 799.3 billion. The ADB assistance utilised in that year was US $ 997 million.
The ADB and Government of India agreed to a new country partnership strategy for 2013-2017 period. Under this strategy, ADB will provide a loan of $2 billion annually. The ADB aims at increasing its sovereign and non sovereign lending to India from the present $ 7 billion to $ 9 billion in thre years from 2015 to 2017 to $ 10 billion to 12 billion.
The Asian Development Bank has been planning to increase its portfolio in the private sector in India. It will look into the possibility of taking up equity in private banks, ports, bridges and petrochemical projects. The ADB may also finance some unconventional projects in the private sector such as road maintenance projects. The ADB has, however, no plan to assist the steel industry and oil exploration projects. The latter are considered as “too high risk” projects to be financed by the ADB. The ADB would endeavor to finance more projects in the infrastructure sector.
