India and Asian Development Bank (ADB) have signed a $350 million policy-based loan under the second subprogramme of the Strengthening Multimodal and Integrated Logistics Ecosystem (SMILE) Programme.
It is a Programmatic policy-based loan (PBL) to support the Indian government to undertake wide ranging reforms in the logistics sector.
Key Pillars of the SMILE Programme
- Strengthening the institutional bases for multimodal logistics infrastructure development
- Standardising warehousing and other logistics assets to strengthen supply chains and promote private-sector investment
- Improving trade logistics
- Promoting smart systems for efficient and low-emission logistics.
Potential Benefits: Reduction in logistics costs, improvement in operational efficiency, and job creation.
CONFUSION IS POSSIBLE
“SMILE: Support for Marginalized Individuals for Livelihood and Enterprise.
About Asian Development Bank (ADB):
It is a multilateral development bank established on 19th December 1966.
It is the principal international development finance institution for the Asia-Pacific region.
Functions:
It assists its developing member countries, the private sector, and public-private partnerships through grants, loans, technical assistance, and equity investments to promote social and economic development.
Headquarters: Manila, Philippines.
Membership:
Membership in the ADB is open to members and associate members of the United Nations Economic Commission for Asia and the Far East.
It’s also open to other regional countries and non-regional developed countries that are members of the U.N. or any of its specialized agencies.
From 31 members at its establishment in 1966, ADB has grown to encompass 68 members, of which 49 are from within Asia and the Pacific and 19 outside.
Control:
ADB is run by a board of governors, which represents the member countries of the ADB.
The ADB was modeled closely on the World Bank and has a similar weighted voting system where votes are distributed in proportion to members’ capital subscriptions.
As of 2022, ADB’s five largest shareholders are Japan and the United States (each with 15.6% of total shares), the People’s Republic of China (6.4%), India (6.3%), and Australia (5.8%).
Source of Funding:
It raises capital regularly through the international bond markets.
The ADB also relies on member contributions, retained earnings from lending, and the repayment of loans for the funding of the organization.
MCQs
What is the main focus of the SMILE programme?
(a) Marginalized livelihoods
(b) Strengthening multimodal and integrated logistics
(c) Enhancing energy efficiency
(d) Increasing forest cover
Who are the largest shareholders of the Asian Development Bank (ADB)?
(a) India and Australia
(b) Japan and the USA
(c) China and India
(d) USA and Australia
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