World Bank Tightens screws

The ministry of health and the ministry of finance have agreed to the World Bank conditionalities to ensure the flow of stalled funds amounting to $800 million for the reproductive and child health (RCH) programme. World Bank imposed stiff conditionalities before it agreed to release these funds. The funding had been stopped after the Bank’s integrity officers discovered misappropriation of funds and grave irregularities in procurement of medical supplies. Two Indian agents procured more than 75 per cent of the supplies during the first phase of the RCH programme in 1998-2003. There are allegations that some of the ministers who handled the portfolio also benefited from these kickbacks. The Central Bureau of Investigation (CBI) is conducting a probe into the RCH scam.

 

 

The conditionalities that the government accepted include following United Nations guidelines for procuring medical supplies till the health ministry puts in place procedures and systems under supervision of World Bank inspectors. The WB is setting aside a few million dollars to train health ministry officials and is expected to deploy some consultants to ensure that there are no leakages of funds. This decision of the ministries of finance and health has spread disquiet amongst Indian drug manufacturers who feel that these procedures would contribute in eliminating their chances of bagging these contracts.