Q. The two kinds of loans offered by Asian Development Bank are Ordinary Capital Resources (OCR) and Asian Development Fund (ADF). Out of them, India started borrowing from ADB through the OCR route since 1986. So far, India has opted out for the soft loan facility of the ADF route.
Which among the following is the most correct reason for India, opting out of the ADF facility of ADB?
Answer:
India has consciously decided to opt out from the ADF because thus India allows the Least Developed Countries to avail this facility.
Notes: India has opted out of the Asian Development Fund (ADF) facility because it is classified as a lender in this context. The ADF primarily provides concessional loans to low-income countries, and by opting out, India allows more resources to be directed towards Least Developed Countries (LDCs) that require financial assistance. This decision reflects India's growing economic status and its commitment to supporting development in poorer nations. As of 2021, India is one of the largest shareholders in the ADB, which further emphasizes its role as a contributor rather than a recipient of soft loans.