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WB loosens purse strings

The move follows India's strong action in response to complaints of wrong-doing, reports S Rajagopalan.

india Updated: Aug 24, 2006 11:05 IST

After withholding assistance to certain Indian projects because of allegations of corruption, the World Bank has approved a $672 million package for India's health sector.

The Bank's approval on Tuesday followed "strong action" taken by the Government of India. It says the move follows after India took strong action in response to the complaints of "wrong-doing" in the procurement process.

"The Bank and the Government of India have agreed to implement a strong action plan aimed at addressing collusion and corruption in procurement across the health sector," said Praful Patel, World Bank's vice president for South Asia.

"These measures will help provide a larger framework to improve governance in the health sector in India and ensure that quality health services are available to millions of poor people," a bank statement said. The three projects that have won approval focus on improved services for women and children and on reduction of infectious diseases.

The projects are the Reproductive and Child Health (RCH-II) Project (US$ 360 million), the Second National Tuberculosis Control Project ($170 million), and the Karnataka Health Systems Development and Reform Project (US$ 141.83 million).

Complaints of malpractices in procurement of pharmaceutical for the earlier RCH-I project had prompted the Bank to withhold presentation and approval of the three projects. "The investigation found instances of serious deficiencies in procurement and its practices. These findings were passed on to the Government of India which took strong action in response to this information," the Bank said.

The RCH-II project will concentrate on the health of poor women and children living in rural and tribal areas and urban slums. By supporting the expansion of this activity, the project aims to accelerate India's progress towards maternal and child health goals outlined in the Millennium Development Goals.

"Despite progress made in improving health care delivery, India still has very high levels of maternal and child mortality. About 136,000 women and 2.4 million children - about a fifth of the world's total - die every year in India mostly as a result of preventable causes," it said.

First Published: Aug 24, 2006 02:43 IST