Asian Development Bank: Indian Economy Notes For UPSC

asian development bank upsc

If you’re thinking about taking the IAS examination, you should definitely have good knowledge of the Asian Development Bank (ADB). But what is ADB and why was it set up? Here are some important facts about this organization. Read on to learn more! Also, read on to know more about its members, voting rights, and objectives. These facts will help you pass the upcoming examination without much trouble.

What Is An Asian Development Bank?

The Asian Development Bank is a regional organization that provides equity investments to member countries in a number of fields including healthcare, public administration, and finance. Its primary mission is to reduce poverty in Asia and foster regional integration and environmental sustainability. The organization provides different forms of loans like both hard loans and soft loans to member countries. You can apply to join this institution by filling out an online application. 

  1. The Asian Development Bank (ADB) was formed in 1966 to meet the needs of Asia’s developing countries.
  2. With 31 field offices in various parts of the world, the bank works to bring about socio-economic development across the region.
  3. Japan holds the highest percentage of shares in ADB with 15.677%, followed by the U.S.A (15.567%), China (6.473%), and India (5.812%).
  4. Its funding assistance in India is focused on assisting low-income countries, increasing economic development, and creating new jobs.
  5. The Asian Development Bank’s funding for India includes projects in transport, agriculture, urban development, finance, and infrastructure.

Know About ADB For UPSC

Abbreviation ADB
When was it founded? 19 December 1966
Where is its headquarters? The Ortigas Center in Mandaluyong situated in the Philippines is home to ADB’s headquarters.
Type Multilateral Development Bank
Legal status Treaty
How many members does it have? 68 shareholders, 49 of them are from Asia and the Pacific.
Region served Asia-Pacific
Purpose Economic and Social Development To provide wealth, inclusion, resilience, and sustainability to the Pacific and Asia, as well as to eradicate poverty.
Who was its first President? Takeshi Watanabe
Who is ADB’s current President? Masatsugu Asakawa (he commenced in an office on January17, 2020.)
Main organ Board Of Governors
Is India an ADB founding member? Yes, India is one of the founding members.
Asian Development Bank (ADB) – Details for UPSC

Objectives And aims Of ADB

  1. The Asian Development Bank (ADB) describes itself as a societal development organization committed to eradicating poverty in Asia and the Pacific through regional integration, environmentally sustainable growth, and inclusive economic growth.
  2. 80% investment in the public sector is used to achieve this.
  3. This is accomplished by making investments in the public administration, financial, health care services, and infrastructure systems, as well as in other fields like assisting nations in better managing their natural resources or preparing for the effects of climate change.

Why Was The Asian Development Bank Necessary?

A regional organization in the Asian area has long been deemed necessary in order to prevent the sorting or postponement of development initiatives throughout Asia and beyond for a variety of reasons. Consequently, the Asia Development Bank was founded.

Do You Know?

  1. The Asian Development Bank (ADB) is modeled after the World Bank and has a weighted voting system in which votes are allocated in proportion to capital subscriptions made by members.
  2. ADB is a United Nations official observer.
  3. ADB has grown from 31 to 68 members since its foundation, 49 from within Asia.
  4. India is currently the bank’s fourth-largest shareholder and top borrower.

Also Read: Asian Infrastructure Investment Bank UPSC

Asian Development Bank & India

India began receiving the support and technical assistance of ADB assistance in 1986. The Asian Development Bank’s goal or mission is to help India in the following sectors:

  1. Jobs creation
  2. Environmental and climate change challenges
  3. Industrial competitiveness
  4. Growth acceleration of low-income states

ADB has a presence in the following six sectors in India:

  1. Energy
  2. Transport
  3. Natural resources and Agriculture 
  4. Urban and Water services
  5. Human development
  6. Public sector management and Finance 

The following 25-state projects in India have received assistance from ADB or are being supported by it:

  1. Coastal protection
  2. Solid waste and water management, sanitation, and sewage are all aspects of urban environmental management.
  3. Renewable energy and energy efficiency
  4. Railways and system of mass rapid transit 
  5. River basin management and fortification of the riverbanks

Recent Developments Between The ADB & India

Recent developments between the Asian Development Bank and India are:

  1. A loan agreement of $206 million has been signed between ADB and India and will be used to better the urban services of five cities in Tamil Nadu.
  2. The Asian Development Bank had created a Conceptual Development Plan (CDP) for the Vizag- Chennai Industrial Corridor (VCIC) (ADB).
  3. The Asian Development Bank (ADB) has posted its 10-year masala notes for Rs 850 crore on India INX’s worldwide debt listing portal.
  4. For the purpose of battling coronavirus epidemics, ADB has given member nations USD 4 million.
  5. The Asian Development Bank (ADB) would give the hospital network Medanta Rs 100 crore to fund medical equipment and healthcare services in the fight against the COVID-19 pandemic. Personal protective equipment, everyday hygiene items, and patient care equipment such as ventilators and beds will be purchased as part of the project.
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Covid-19 And ADB

The World Bank Group and the Asian Development Bank are coordinating more than $15.4 billion in large loan projects in South Asia, Southeast Asia, and East Asia in response to COVID-19.

What Is ADB’s 2030 Strategy?

The Asian Development Bank (ADB) will be better able to meet the region’s evolving needs thanks to Strategy 2030. ADB will continue to endeavor to get rid of acute poverty in accordance with Strategy 2030 and will widen its vision of creating a Pacific and Asia region that is thriving, inclusive, irreplaceable, and sustainable.


  1. In October 1995, a policy statement titled “Governance: Sound Development Management” was published.
  2.  ADB defines governance as “the way power is exercised in the administration of a country’s economic and social resources for development.”
  3. Governance, in ADB’s perspective, can be understood through two dimensions, namely:
    a. Economic- Manage public resources effectively
    b. Political – Human Rights, Democracy
  4. ADB has outlined four essential components of good governance. They are accountability, transparency, participation, and predictability.


  1. Officials of the Indian Government are required to be responsible for their actions and responsive to the subject matter of their jurisdiction.
  2. The examination of the economic performance of public sector institutions is a means of checking their accountability. 
  3. Some of the specific areas of action suggested are:
    a. enhancing public sector management to strengthen governmental capabilities,
    b. public finance management, 
    c. public-enterprise management and reform, and
    d. civil-service reform.


  1. Projects and programmes of the government should give those who benefit from them and those who are impacted by them the ability to improve the planning and execution of these initiatives.
  2. Particular focal points would be the introduction of participatory development processes, such as beneficiary involvement, a private/public sector interface, decentralization/empowerment of local government along with collaboration with non-governmental organizations (NGOs).


  1. Holding the government and its agencies to comparable legal standards as private enterprises and individuals is necessary for the predictability.
  2. A key area of activity could be the creation of a stable legal base for private-sector development.
  3. Laws, policies, and regulations that are administered fairly and uniformly should govern society.


  1. For the private sector to make sound economic decisions and combat corruption, timely access to economic data can be essential.
  2. Rules and guidelines should be precise and unambiguous, and the general public should have access to information.
  3. All of the preceding aspects are interrelated, mutually beneficial, and reinforcing.
  4. The best assurance of predictability is accountability, which is typically tied to participation.
  5. Making sure that public institutions are made liable would be easier if a regulatory system operated in a transparent and predictable manner.


  1. Large-scale projects funded by the Asian Development Bank have been accused of harming society and the environment due to a lack of monitoring.
  2. Oxfam Australia has criticized the Asian Development Bank for being inconsiderate to local residents.
  3. Asserting in a report that “much of the expansion has bypassed more than 70% of its rural population, many of whom are directly dependent on natural resources for lives and incomes,” the UN Environment Program also attacked the bank.
  4. The bank has received criticism for both its insignificance and its involvement in the food crisis. The ADB has been charged by civil society with disobeying warnings prior to the crisis.
  5. Human rights and Environmental organizations contend that the Asian Development Bank’s environmental protection rules, as well as those pertaining to indigenous peoples and forcible relocation, are often disregarded in practice, are too unclear or feeble to be effective, or are disregarded by bank officials.
  6. Detractors of the ADB have alleged that the United States and Japan, the two largest donors, have significantly influenced decisions about hiring, policy, and excessive lending since the organization’s creation.

Significance Of ADB

  1. Asian Development Bank’s core existence is centered on the attainment of a specified aim.
  2. The objective is to promote economic growth in the Pacific and Asian regions.
  3. Development banks contribute to the expansion of capital markets.
  4. They make mutual fund investments and support the growth of India’s capital markets.
  5. Additionally, they make investments in the shares and debentures of numerous Indian companies


With an annual budget of several billion dollars, the Asian Development Bank runs 50 or more trust funds, financial cooperation facilities, and other funds that support economic and social development across the Pacific and Asia. The issue of five-year offshore notes linked to the Indian rupee (INR) brought in Rs. 5 billion for the Asian Development Bank. We hope this article has been helpful.


Q1. What Is ADB, And How Many Members Make This Organization?

The Asian Development Bank was created with the goal of fostering economic development and international cooperation in one of the world’s poorest regions. When founded, the Asian Development Bank had 31 members; by 2021, there were 68.

Q2. When And For What Purpose Was The ADB Founded?

The Asian Development Bank was established in 1966 with the mission of eradicating extreme poverty while building a prosperous, resilient, inclusive, and sustainable Pacific and Asia region.

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