The Hindu Business Line : Finance Ministry clarifies

The Finance Ministry’s attention has been drawn to the article “Corruption in health projects funded by World Bank” (Business Line, June 2) on the Detailed Implementation Review of five health sector projects in India that were financed by the World Bank.

The story gives an incomplete account on the subject. The complete and factual account of the DIR and the follow-up actions being taken by the Government and the Bank is given below: The Bank conducted a DIR of five health sector projects in 2006-07. It presented the Review to the Government in January 2008. The report of the DIR was made public at the insistence of the Government of India. The Government is committed to undertake systemic improvements in implementation of all development projects and has taken the DIR in a positive spirit.

A time-bound Joint Action Plan has been prepared between the Government and the World Bank in February 2008. It was presented to the Executive Board of the World Bank in March 2008. Several referrals have been made by the Health Ministry to CBI for investigations into possible indicators of wrong-doing that emanated from the DIR.

The Government of Orissa has also ordered a high-level probe into the allegations contained in the DIR. Actions being taken by the Government in the wake of the DIR have been appreciated by the Bank Board which has found the Joint Action Plan to be satisfactory.

The DIR does not only speak of indicators of possible wrong-doing, but also indicts the Bank procedures and project designs that were responsible for implementation weaknesses. Several weaknesses detected in the DIR were caused due to defective project designs. It is also contended that all procurements that were reviewed under the DIR were subjected to prior or post-approval of the Bank.

The Bank has acknowledged the comments of the Government about the DIR and has conceded that it “could have been done better”.

Many observations contained in the DIR are subjective, unilateral deductions that could have been avoided if the Bank had consulted the Government prior to finalisation of the report.

In fact, the Bank has declared that it would improve the DIR methodology in view of the India DIR experience.

The news item quotes from findings of Transparency International and the World Bank Institute. The methodology and parameters used by Transparency International are questionable, and there is no global consensus on objective, disaggregated indices on which corruption can be measured.

In fact, Government of India has been encouraging the Bank to concentrate on devising a set of objective parameters on which corruption and transparency can be measured and to obtain a global consensus on the same. Prior to this, perceptional and subjective rankings by some organisations cannot be cited as evidence.

The Government is not aware of any ranking of India on any corruption index by the World Bank Institute.

The Government is committed to relentless systemic improvement in the implementation of development projects to maximise intended outcomes from development expenditure. It is equally committed to investigating allegations of wrong-doing and to visit the guilty with exemplary punishment.

B. S. Chauhan Addl D-G (M&C) Ministry of Finance Govt of India

The author, B. S. Raghavan, writes:

The particulars in the column were taken from information considered authentic. The article itself refers to India’s protest to the World Bank on the unfair and one-sided review. As regards the country-wise ranking for corruption brought out by such organisations as Transparency International, it is better for the Government to make clear its reservation on what it regards as ‘questionable’ methodology, as those indices of corruption are taken at their face value worldwide.