From UPSC perspective, the following things are important :
Prelims level: Asian Development Bank (ADB);
Mains level: Developments in Indian Subcontitnent; India's GDP growth projection by ADB;
Why in the News?
The Asian Development Bank (ADB) increased its GDP growth projection for India for the current fiscal year to 7%, up from its previous estimate of 6.7%.
Reason behind the increased India’s GDP growth projection by ADB:
- Manufacturing Sector: The manufacturing sector growth of India in the 2023 fiscal year was robust, with the S&P Global India Manufacturing PMI rebounding to 56.0 in November 2023 from an eight-month low of 55.5 in October 2023.
- Investment and Consumption Demand: Investment and Consumption demand are both expected to drive India’s economic growth in 2024 and FY25. Private Final Consumption Expenditure (PFCE) grew at 3.5% in the December quarter of FY24.
- Inflation Trend: Inflation in India is expected to continue its downward trend in tandem with global trends Inflation in India decreased to 5.09 percent in February 2024 from 5.10 percent in January 2024. India’s inflation rate is projected to trend around 4.30 percent in 2025, according to econometric models.
- Monetary policy: The RBI has kept the repo rate unchanged at 6.5% for 2023-24, focusing on withdrawal of accommodation to ensure that inflation progressively aligns to the target while supporting growth.
Government Initiatives taken for Regional Development:
- Regional Cooperation and Integration (RCI) Conference, 2023:
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- It was organised by the Asian Development Bank (ADB) at Tbilisi, Georgia.
- Theme: ‘Strengthening Regional Cooperation and Integration through Economic Corridor Development (ECD)’.
- Objective: To integrate spatial transformation and area-centric approach with the help of Economic Corridor Development.
- In this Conference, India offered its indigenously developed GIS-based technology though knowledge sharing to ADB and South Asia Sub-Regional Economic Cooperation (SASEC) countries for enhancing socio-economic planning and regional cooperation.
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- PM GatiShakti National Master Plan and Multi-modal Connectivity:
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- Basically, PM Gati Shakti is principled to bring socio-economic area-based development as part of regional connectivity.
- It is being implemented to enhance connectivity with regional partners with the help of GIS-based technology. For Example: Indo-Nepal Haldia Access Controlled Corridor project.
BACK2BASIC:About Asian Development Bank(ADB):
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Conclusion: Indian government’s effort across the robust manufacturing growth, investment, working on consumption demand, decreasing inflation, and supportive monetary policy, aligning with its goal of promoting regional social and economic development are gaining some fruits.
Mains PYQ:
Q China is using its economic relations and positive trade surplus as tools to develop potential military power status in Asia’, In the light of this statement, discuss its impact on India as her neighbor.(UPSC IAS/2017)
Q India has recently signed to become founding member of New Development Bank (NDB) and also the Asian Infrastructure Investment Bank (AIIB). How will the role of the two Banks be different? Discuss the strategic significance of these two Banks for India. (UPSC IAS/2014)
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