Context: The Asian Development Bank (ADB) has assured the Ministry of Finance of USD 2.2 billion (about Rs 16,500 crore) support to India in its fight against the Covid-19 pandemic.

Background of this move

• Weakening global economic growth is causing disruptions in India’s trade and manufacturing supply chains,
• Slowdown in tourism and other economic activities,
• Strain on the large number of micro, small, and medium-sized enterprises,
• A negative impact on the livelihood of formal and informal labourers across the country, etc.

ADB praised the Indian government’s decisive response to the pandemic, including 

• a national health emergency program.
• Tax and other relief measures provided to businesses.
• Rs 1.7 lakh crore economic relief package (Pradhan Mantri Garib Kalyan Yojana), which provides immediate income and consumption support to the poor, women, and workers affected by the three-week nationwide lockdown.

Key Points

• In March, 2020, ADB announced an initial package of approximately USD 6.5 billion to address the immediate needs of its developing member countries, including India, as they respond to the Covid-19 pandemic.
• The World Bank has approved a $1-billion assistance to help India prevent, detect and respond to the outbreak, and strengthen its public health preparedness.
• The loan has been sanctioned to support immediate priorities such as disease containment and prevention, as well as social protection for the poor and economically vulnerable sections.
• “The quick-disbursing fund is part of a larger package of support that ADB will provide in close coordination with the Government and Other Development Partners.

ADB’s Support to India

• It is now preparing USD 2.2 billion in immediate assistance in response to Covid-19 to the health sector to help alleviate the economic impact of the pandemic on the poor.
• ADB is also engaged with the private sector to meet its financing needs during this period.
• It is ready to provide further financial assistance and policy advice whenever the situation warrants.
• ADB is also planning to consider all financing options available to meet India’s needs, to facilitate swift disbursement of ADB funds including emergency assistance, policy-based loans, and budget support.

About Asian Development Bank

• It is a regional development bank which was established in 1966.
• Its headquarter is in Manila, Philippines.
• It aims to promote social and economic development in Asia.
• It admits the members of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and non-regional developed countries.
• It is modeled closely on the lines of World Bank having similar weighted voting system where votes are distributed in proportion with members' capital subscriptions.
• Japan holds the largest proportion of shares followed by US, China, India and Australia.
• It envisions a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty in the region.
• Currently, it is owned by 68 members, out of which 49 members belong to Asia-Pacific region.

Other recent development between ADB and India

• ADB and India have signed a loan of $206 million to strengthen urban services in 5 Tamil Nadu cities.
• Asian Development Bank (ADB) has listed its 10-year masala bonds worth Rs 850 crore on the global debt listing platform of India INX.
• Asian Development Bank (ADB) had prepared a Conceptual Development Plan (CDP) for Vizag-Chennai Industrial Corridor (VCIC).