1) How to deliver abroad
GS3: Issues related to the Indian Economy
Context:
The authors talk about enhancing India’s development cooperation.
Editorial Insights:
What’s the matter?
Looking into India’s development assistance evolution/Progress:
Over the years, India’s assistance to other developing countries has multiplied several times.
As per official data, India provides development assistance of $ 6.48 billion receives the assistance of $ 6.09 billion annually.
India has been supporting the developmental endeavors of several of the African & Asian countries.
But the process lacks a firm Institutional foundation.
Indian mechanism in this regard:
India’s development cooperation has converged to an all-encompassing integrated framework that has 5 modalities:
Capacity Building,
Concessional Finance,
Technology sharing,
Grant &
Trade wherein duty-free & quota-free access to the Indian market is provided.
India’s most partnerships involve one of these modalities or some combinations.
For instance, in the Mozambique case, the support for solar panel production was through 3 modalities like capacity building, line of credit for infra & a grant element.
At this juncture, concessional financing in India’s development cooperation portfolio is 70% which amounts to $ 2.23billions.
In 2015, the govt has made some reforms:
to bring in operational changes in the way credit lines work.
Strived block fly-by-night operators,
Promote the most competitive Indian firms that are being identified with a transparent bidding & tendering process.
Ways to promote infra financing abroad:
Countries use sovereign & non-sovereign windows for promoting infra financing abroad.
For instance, The DEG & KfW Development Bank in Germany, World Bank, the private sector windows of Asian Development Bank & African Development Bank are notable examples.
Such a non-sovereign window would provide greater flexibility & bandwidth.
In addition to green fields, the fund is used for brownfields to complete the projects within the timeline.
Significance of new entity for Development Cooperation Assistance:
To become s leading strategic investor in commercially viable areas.
To make public-private partnership infrastructure projects financially attractive.
The fund will help in building an investment ecosystem in Africa.
The proposed new entiry also provides a handholding to select performing Indian social enterprises to operate in other countries.
Along with the economic impact, it can facilitate development partnerships between India & other countries.
It can support partner countries in combating natural disasters, political & humanitarian crises & in building social infra.
It gels with the increase in the scope of development cooperation following higher economic growth & rising trade & investment flows to emerging markets.
It will help the countries where the official development assistance is seemingly inadequate & ineffective in addressing myriad developmental concerns.
Concluding Remarks:
It is high time for India to restructure its development finance apparatus for deeper & effective engagement & to address the rapidly evolving newer competitive financing landscape.