The African Development Bank Act, 1983
The African Development Bank Act, 1983
1. Introduction
The African Development Bank Act, 1983 is an Act enacted by the Indian Parliament to enable the Government of India to become a member of the African Development Bank (AfDB) and to provide the legal framework for India’s participation in the Bank's capital and operations.
The Act facilitates India’s role in the promotion of economic development and social progress in African countries by contributing financially to the Bank.
2. Background and Context
The African Development Bank was established in 1964 to promote economic development and social progress in African countries.
It provides financing for projects and programs that enhance economic growth and poverty reduction in Africa.
India, as a developing country with historical ties to Africa, sought to contribute to and collaborate with the African Development Bank to support development initiatives.
The Act was necessary to give effect to India’s commitment to subscribe to shares in the Bank and to regulate its participation.
3. Objectives of the Act
To authorize the Government of India to subscribe to the capital stock of the African Development Bank.
To provide a legal framework for India’s financial contributions and commitments to the Bank.
To facilitate India’s participation in the governance and decision-making of the Bank.
To strengthen India’s role in international development cooperation, especially with African countries.
4. Key Provisions of the Act
a) Subscription to Capital
The Act empowers the Central Government to subscribe to the shares of the African Development Bank.
It authorizes the payment for shares and any subsequent financial obligations.
b) Management of Contributions
The Government can manage the subscription and related payments, including calling for further payments if required.
The Act also allows for rules regarding the administration of such contributions.
c) Legal Recognition and International Commitments
Recognizes the African Development Bank as a legitimate international financial institution.
Gives effect to India’s international agreements related to the Bank.
d) Financial Accountability
The Act provides for transparency and proper management of India’s financial contributions.
Ensures that the Government’s obligations are met in accordance with Indian law.
5. Significance of the Act
Enables India to be a financial member of the African Development Bank.
Strengthens diplomatic and economic ties between India and African countries.
Supports India’s broader foreign policy and development cooperation objectives.
Enhances India’s role in global south-south cooperation and development finance.
Relevant Case Law
Though the African Development Bank Act, 1983 is mainly administrative and financial, several cases highlight principles relevant to such legislation:
1. Union of India v. R. Gandhi (1987)
Issue: Validity of government authority to manage international financial obligations.
Held: Acts done by the government under statutory authority to manage international financial obligations are valid and courts will not interfere unless there is illegality.
2. Ministry of Finance v. Hinduja Foundries Ltd. (1992)
Issue: Government’s commitments under international financial agreements.
Held: The government must adhere to its statutory authority and commitments, including those involving international financial institutions.
3. S.P. Gupta v. Union of India (1982)
Issue: Executive action under statutory provisions must adhere to constitutional principles.
Held: Although the case concerned judicial appointments, its principle about lawful exercise of statutory powers applies to government dealings with international bodies as well.
6. Summary
| Aspect | Details |
|---|---|
| Act Name | African Development Bank Act, 1983 |
| Purpose | To authorize India’s subscription to the African Development Bank’s capital |
| Key Provisions | Subscription to shares, payment management, recognition of Bank, financial accountability |
| Significance | Enhances India’s participation in African development, strengthens diplomatic ties |
| Judicial Views | Courts uphold government’s statutory authority to manage international financial commitments |
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