World Bank Funded Reproductive and Child Health Project in Punjab, India Another 'Project Corruption' OR " Reducing Poverty" A Report (December, 1999) India and World Bank Group 2 Punjab – overview 2 Punjab State Health Department, WB funded PHSC and Corruption 3 RCH Program in India and Punjab 5 Corruption Scam in RCH Project at Sangrur 6 Conclusion and Implications 8 Recommendations 9 By Dr. Vineeta Gupta General Secretary, Insaaf International (A member organization of global 'Citizens committee' on World Bank Bond Boycott) and Member National Council People's Union for Civil Liberties (PUCL), India Kishori Ram Hospital Building, Basant Vihar, Bhatinda, Punjab, India E mail < vineetag@ch1.dot.net.in > Phone 91-164 –215400 (work), 253903 (home), Fax- 214500 Website– www.geocities.com/insaafin World Bank Funded Reproductive and Child Health Project in Punjab, India Another 'Project Corruption' OR " Reducing Poverty" A Report India and World Bank Group India joined the World Bank (WB) in 1944. It is the WB's largest single borrower, with cumulative lending of about $44 billion as of June 1998 in market-based loans from the International Bank for Reconstruction and Development (IBRD) and development credits from the International Development Association (IDA), the World Bank affiliates. From 1949 to June 1998, the Bank has extended about 169 loans and 225 development credits to India, totaling approximately $20.1 billion from IBRD and $24.2 billion from IDA. The social sectors (population, health and nutrition; education; and social protection) comprise the largest share of the total portfolio in dollar terms (29 percent). India was the Bank's third largest borrower in FY98, with lending commitments reaching about $2.1 billion ($1.073 billion IDA and $1.068 billion IBRD) for 11 projects. "The Bank's assistance program for India focuses on reducing poverty; accelerating human development; promoting state-level reforms and sectoral reforms in rural development, power, and urban areas in support of India's efforts to extend the coverage and depth of structural reforms begun in 1991; and supporting financial and private sector development." . India pays more than it receives. During 1993-98, India gave the bank $1475 millions more than it got from WB. In fiscal year 1998 ending June, India paid WB by way of repaying and interest charges on the bank loans and IDA credits, $478 million more than it received . Punjab – overview The state of Punjab is located in the northern part of India and covers an area of 50,362 square kilometers. Population is estimated at 20.3 million. Punjab govt. spends 67% of each Indian rupee of the earning of government on establishment and only 33% for development and welfare schemes . Once one of the most prosperous states in India, today has highest per capita debt whose burden has crossed 24,000 crore this year. It has virtually gone bankrupt . Though there are many reasons for this unfortunate development but corruption is a major contributing factor along with the faulty polices. - 2 - The Controller and Auditor General's (CAG) report (civil, revenue, receipts and commercial) for 1996-97 says that the "principles of sound public finance have been eroded". And that, "Though the blood bank facilities were available in hospitals, none of these obtained the required license from the Central Drug controller." CAG report found out, besides health services in poor state, the diversion of substantial funds for the National Malaria Eradication Program (NMEP) for non-malaria work. The scheme was not implemented in 17 towns during 1992-97. Punjab has a high birth rate of 27.7 and an infant mortality rate of 53 per 1000 live births. It has a very poor sex ratio of females to males, 882 females per 1000 males, even lesser than the national ratio. The national average of female to male is also declining with 972 females per 1000 males in 1901, 935 in 1981, 927 in 1991 despite the 'efforts' of the government. It is suspected that both foeticide and infanticide contributes to this decreasing gender ratio. The women in Punjab are worse off than elsewhere in the country. The ratio of women to men has gone as low as 86 to 100 as per March '99 report. In the recent statement, Chairman of Punjab State Human Rights Commission said that there were 750 females for every 1000 men in Punjab . The fast pace of decreasing ratio is alarming and calls for emergency measures to deal with the problem. The health status of children and women is miserable. Even the Director of health and family welfare Punjab admits that the health status of women and children in Punjab is appalling with majority of them suffering from various diseases. 40 % of all children are under weight and 40 % have stunted growth . Though many health workers and activists feel this is an understatement of the real facts. Punjab State Health Department, WB funded PHSC and Corruption The public health system consists of three tiers and was managed solely by the state through the Department of Health and Family Welfare. The World Bank Group's Country Assistance Strategy for India supports broad-based, private sector-led growth. The World Bank funded Punjab Health System corporation (PHSC) was established in health sector of Punjab eroding the very foundation of the state responsibility to provide basic health care in perspective to right to health. India is a welfare state. Article 47 of the constitution of India imposes duty upon the state to raise the levels of nutrition and the standard of living of its people and the improvement of the public health under the directive principles. The structural changes, one of which is charging user fee was introduced in WB funded PHSC. It worsened the already crippled state health services. Patients could not afford the treatment at new charges and deserted hospitals. The newspapers often carry reports of one or the other corruption and mismanagement scams in WB funded Punjab Health Systems Corporation (PHSC) and State Health Department (SHD). - 3 - 23.40 lakh condoms meant for free distribution to the poor under family planning program were set afire by the health department officials of Ludhiana district of Punjab. Inquiry into the matter was completed in October 1996 by the then deputy Director (AIDS), But no action was taken. Huge boxes of condoms were allowed to rot in the rains. The inquiry officer reached the conclusion that condom distribution was in fact a sham and that the same were burned. Evidence included the photographs, burned silver coverings of the condoms and the inspection of the site . The civil surgeon of Kapurthala district alleged misappropriation in pulse polio immunization drive World Health Organization (WHO) funds in December 1998. Present Additional Director and other senior health officials of the PHSC are involved in medicine scam worth Rs. 1.5 crores. The records of civil surgeon Jullandhar established the fact that medicine worth Rs 0.60 lakh with unconsumable color was purchased and given to patients for consumption even before the samples were tested which proved the color of medicine, not fit for consumption. Matter was hushed up and no action was taken against the officer responsible for it. Rather promotion and unprecedented multiple charges of various departments were given to him. Our own survey of three districts showed that a lab chemical Glycerol GR meant "for lab use only", was given for oral consumption to patients and was not used in the laboratories. It was much overpriced, without manufacturing/packing or expiry date and purchased from dubious company. We observed that most of the medicine and equipment purchases by the PHSC and SHD were commission and corruption oriented rather than the need based. The list is endless and not possible to mention all the corruption scams in Health sector, which is undergoing policy and other reforms with 'AID' of WB. The one's that come under public eye are not even the tip of the iceberg. There is absolutely no public accountability, transparency and access to the project implementation in general. Reproductive and Child Health (RCH) Project of World Bank This project is to assist the Government of India (GOI) to improve performance of its Family welfare Program (FWP), ultimately contributing to stabilization of population growth. It is a sector investment project, envisaged to be first in a two part financial support for the Family Welfare Program to implement a nation wide policy change. Estimated that nation wide implementation of program strategy would require a project cost of about US$600 million. The project would provide Interim Trust funds (ITF) financing of US$ 284 million for five years period (expected effectiveness date being August 15, 1997 and closing date March 31, 2003). The borrower is Govt. of India (GOI). Financing plan is to provide 248.3 million US $ from the IBRD/ IDA and - 4 - 60.5 million US $ from the government. It will be a two part financing consisting of two overlapping 5year projects covering an 8year period. The benefits and beneficiaries as perceived by the WB are poor women and children below age of five living in rural areas and urban slums throughout India by improving health during reproductive years and early childhood. The project is supposed to have economic and environmental benefits by reduced growth of population to the society as a whole and contribute to women empowerment. The project is aimed at decreasing the health risks and burden of disease associated with pregnancy and childbearing among 220 million women in the reproductive age group in India, in particular, poor women and increasing child survival in the age groups of 0-4 years. The outcome is projected to improve implementation, more responsive use of resources, reduce poverty, increase the role of beneficiaries in project design and implementation, and enabling women to participate more fully in the development process. Some of the issues addressed by the project include poor quality of care associated with shortage of supplies, drugs, female staff and improper behavior of staff contributing to client dissatisfaction, inadequate funding, poorly coordinated top – down management, inadequate mobilization of the resources. WB has totally ignored to address the most important of all issues - the issue of corruption, which is one of the major root causes of failure of all projects and developmental works in India. The politicians, bureaucrats and International Financial Institutions (IFI), the self appointed poverty lifters of the third world countries, very conveniently look away from the main issue contributing to the failure of development projects and impeding the progress of the country in true sense. Each one of them is having it's own hidden agenda and benefits to do so. RCH Program in India and Punjab 24 District projects were prepared and approved under the RCH project in Phase- I of the WB project. Some more district plans are to be taken in the phase II. GOI and WB approved the District Project Implementation Plan (DPIP) for each of the district. The Department of Family Welfare, Ministry of Health, Govt. of India made 119-page scheme for implementation of RCH program. The project specified the annual phasing of the expenditure under each area project. The funds for implementation of these area projects equivalent to the first years assessed expenditure to be released on receiving a letter of request from the concerned state government informing that the arrangements for efficient implementation of the district projects have been made by the state government. The next lot of the funds is to be released after the state reports the expenditure of at least 75% of the previous installment of grant. For 'smooth ' and ' timely' inflow of the funds under the RCH program, funding is to be routed through state level registered societies named State Committee of Voluntary Action (SCOVAs). However in Punjab funds would be provided through the state budget. This was done because " it has been established that the transfer of funds under - 5 - previous project was quite satisfactory" . Director, Family Welfare as project director would be responsible for compiling and preparing disbursement applications. In Punjab, Sangrur was chosen for the implementation of this project with fund allocation of Rs.12.62 crore for population of 16.85 lakh. State RCH project society (State committee of voluntary action), Punjab, with office of Director health and Family Welfare as head office, was registered under the Societies Registration Act, 1860 on August 21, 1998 at Union Territory of Chandigarh . Mr. Rajesh Chabbra IAS, Principal Secretary Health as Chairman, Dr. Puran Singh Jassi, Director Health as Project Director and Dr. Sukhdev Singh, Deputy Director (Family welfare) as State Project Co-director assumed main responsibility in the implementation of WB funded RCH scheme. Corruption Scam in RCH Project at Sangrur There is absolutely no way for people or NGO's to get the information about policy implementation, fund expenditure and utilization in various schemes of the government. Very few corruption scams make their way to the pages of newspapers as compared to the actual number. One such scam was in RCH scheme at Sangrur. The Vigilance bureau seized and sealed the consignment of medicines and equipment worth Rs. 90 Lakh on 31.3.99. Five truck loads of medicines and other equipment arrived in civil hospital at Sangrur under the RCH scheme. The suppliers downloaded the stock in the rooms of hospital without permission of the local Health authorities, locked the three rooms of the hospital in which things were kept and fled. The health authorities refused to accept it as they allegedly suspected the supplies to be spurious and heavily overpriced. The vigilance bureau sealed the goods after the controversy between local health authorities and suppliers over receiving the same. Various letters of the civil surgeon to local vigilance authorities, Director, Health to Civil Surgeon etc and news reports show that civil surgeon (CS), Sangrur was asked by the higher health authorities including Minister and Principal Secretary, Health to receive the controversial stock and to send the bills. In one of the letters the CS was directed to take over the goods and send the bills for further action since the inspection of the goods had already been done and found okay. After appearance of the news of the scam, the honorable Special judge, Patiala, took suo- motto notice. Vigilance bureau was asked to submit the report on the case by Sept. 30, 99. The report, which was considerably delayed, found that goods purchased were heavily overprice, of substandard quality, many did not have either ISI mark or name of - 6 - the company on it. And the procedure followed in purchase of goods was violative of the rules. The Judge ordered the registration of the FIR (Criminal case) as the report showed prima fascia case was made out . A case under section 13(i) (d) JE/362/88 PC act (Prevention of corruption act) /20b-420Indian Penal Code was registered on 19.11.99 against Dr. Puran Singh Jassi and others. The investigation revealed that Finance department sanctioned Rs 2.25 crore for the scheme in January .99 A technical committee of Government doctors was constituted, headed by Dy. Director (Family Welfare) to finalize the specifications of the equipment to be procured and to prepare technical report of tenders. The tenders were never invited and equipment included Generators, Drinking water coolers, Fax machines, Air conditioners etc. The Principle Secretary Mr. Rajesh Chabbra approved the committee on 8.10.99. The sequence of events from 26.3.99 to approaching D Day i.e. 31.3.999, the concluding day of the outgoing financial year was as follows: - 26.3.99 (Friday) - Meeting of the technical committee was called on to prepare the specifications for purchase of goods. 29.3.99 (Monday)- Another committee consisting of three Health officials including chairman of technical committee was formed to open the quotations. 30.3.99 –Inspection committee consisting of three Govt. doctors formed to go and inspect the items at the site, which consisted of 11 firms in four cities. 30.3.99- On the same day after the formation, Inspection committee started its journey to Ambala, Panchkula, Saharnpur and Delhi to inspect hundreds of items after about 3.30PM. 31.3.99- Completed their journey covering hundreds of Kms, inspected all the pieces to be purchased, prepared reports after visiting 11 firms in four different cities and submitted it to the RCH officials at Chandigarh at the same day. 31.3.99- RCH officials placed the orders of the things inspected by the 'most efficient' inspection committee. 31.3.99- All the inspected goods from 11 firms reached Sangrur on the intervening night of 31.3.99 and 1.4.99 and were sealed by the vigilance department on early morning of 1.4.99. The goods purchased under the RCH scheme were in bulk and with less tax payment still the same brand goods were available in retail market at much cheaper rates. A few examples are as under:- Stethoscope bought for Rs 500 is available at the retail price of Rs 75 of the same brand. BP apparatus was bought at price of 500 as against the retail price of 380 Rs. - 7 - Rectum thermometers, Ambubag, mucous extractor, were purchased at the price of 50, 110,150 Rs each as compared to retail price of 20, 12 and 100 Rs. Water cooler of 30 to 40 Liters capacity was shown to have been purchased, where as it was found out the capacity was only about 16 liters. Same is with the Generator sets, which were supposed to be of 12 Km, were found to be of about 5 Km where as the same was falsely stamped to be of 10Kw capacity. The Air conditioners at much more rate and locally assembled were bought. The model of fax machines that were bought was not manufactured for the Indian market (different electricity specifications) by the company. The deal for fax machines is alleged to be from illegal sources. The cost of chemicals bought was assessed to be about 570,00Rs as per the rate list of the company, which was purchased at about 2, 960, 00 Rs. Meanwhile the inquiry was going on, the health department cancelled the purchase orders giving credence to the charges of sub-standard supplies. This hoax of a purchase procedure is a sheer fun of the rules and regulations. It is a grim picture considering that the Health department and Political bosses never find 'enough evidence' to punish the guilty. I in my last more than 14years as human rights activist and former medical officer in the Punjab State Medical Services (PCMS) know none of the cases where suitable punishment was given as an end result. After the initial dust settles down, the accused often get better postings and position because of their proven 'suitability' for task of the ruling masters. Either the cases are hushed up or the corrupt escapes by pinning up the charges on the lower staff. The responsibility fixation in the whole of this scam does not find any mention of the Chairman of the RCH society. The Chairman cum Principal Secretary was given the most important portfolio of the home affairs, after this scam. The department of home fully controls the police department also. The investigation has been shifted from the officer who unearthed the scam to another one. No arrests were made after the filing of FIR to give enough time to accused persons to find out ways and means to save themselves. Conclusion and Implications RCH project here is nothing but another 'project corruption'. The top officials of the RCH project in Punjab, hobnobbed with the firms to pocket the main portion of funds available for improvement in the health of mother and child and 'reducing poverty' as ultimate goal. The vigilance bureau initially did a good job. Now the efforts are being made by the higher officials of RCH scheme to push the scam under the carpet to save themselves as some of them have acquired the most influential posts in Punjab. If the social, democratic and human rights bodies do not pursue this scam, it will be another effort of some honest officers (a rare and endangered specie) going down the drain. None of the political parties have the will or serious conviction to deal with the issue of corruption, thought it is a favorite election and mudslinging agenda for them. Corruption, abuse of office, mismanagement, lack of transparency, ill-conceived policies and corruption oriented schemes of the public servants and politicians have brought us at the threshold of bankruptcy. The projects are conceived and made with a - 8 - basic view to create new avenues for corruption. Most of the money borrowed from the International Financial Institution (IFI) formed by the trio of WB, IMF and World Trade organization (WTO) and other sources is simply squandered and pocketed by few corrupts, at the cost of mortgaging the future of our country and generations to come. In own words of the WB "Corruption hinders economic efficiency, diverts resources from the poor to the rich, increases the costs of running businesses, distorts public expenditures, and deters foreign investors and erodes the constituency for development programs and humanitarian relief." The WB although has a elaborate instructions to deal with corruption in their own organizations and the projects funded by it, but does little to apply those instruction. The agenda of the WB and likes is not assisting governments of the third World countries in reducing poverty but pressing the countries under the debt to dictate the structural changes, create new consumer societies for the west and to enable the west to rule the third world countries. Even large scale corruption in various WB funded project does not affect the WB so long as their hidden agenda is served. The present phase is similar to the phase of establishment of East India Company in India, which ultimately became instrumental in the long enslavement of the country. Five decades into independence and the gap in rich and poor, unemployment and poverty has increased more than ever. We continue to pay more than the assistance we receive from IFI, 'The lords of poverty'. None of the rulers have time and will to rectify what is going wrong. Totally dumb schemes and policies are floated one after another without any honest effort to consider and rectify the reasons of failure of previous ones. There are tall claims of doing efforts for reducing poverty by the domestic as well as external forces, each effort resulting in more burden of paying the debt, falling most heavily on the poor, those who are least able to carry it. It is ultimately them who have to pay for the corruption, mismanagement, foolish policies and extravagant mistakes of the. powerful elite Government is becoming more and more accountable to external creditors than to their own citizens. The debt burden of the country as well as state is increasing day by day. Using the debt pressure we are forced to adopt Structural adjustment programs (SAPs) of the IFI. These adjustment policies, aimed at servicing the debt result in undermining of our social, economic and cultural rights SAPs serve as "a transmission-belt" to facilitate the process of globalization, through liberalization, deregulation, and reducing the role of the State in national development. The approach of SAP is to reduce the budget by eliminating free services, charging user fees, for example, for education and health care. The most crucial impact of structural adjustment (globalization and liberalization) has been on the role of the State in provision of social services such as health, education, social security and national development. In case of Punjab the introduction of user fee in health services defeats the very goal of basic health care as state responsibility and goal of "Health for all by the year 2000" has been severely undermined. - 9- Recommendations Total transparency into all public fund expenditure and policy Implementation is needed to check menace of corruption. Serious efforts of the rulers must be there to punish the guilty of misuse of power, mismanagement, corruption, favoritism and nepotism in public offices. The ruling and opposition political parties must stop making this issue a political prank only. Checking corruption and incompetence ensures the most efficient utilization of scarce resources. Effective changes in law and implementation of existing provisions must be done to retrieve money pocketed by corrupt leaders and bureaucrats. It must be ensured that the people have a significant voice in shaping how development policies in general are formulated and implemented and especially those effects their social and economic welfare. Must bring such reforms so as to empower and enable disadvantaged men and women to fully participate in decision-making, and provide opportunities to challenge internal and external exploiters. Policy which is imposed from above or from outside by those who assert that they have the knowledge and arrogate to themselves the authority to decide for others, hardly ever gets enthusiastic participation from people. Participation is a human right. Governments must listen to their people rather than being dictated by the external forces. Rulers must stop to try to project critics of their deeds as anti-national. The long forgotten policy of self-reliance / swadesi has to be revived. The vicious circle of begging /borrowing and squandering has to be broken. The dependency on external forces must come to an end. We must say NO to the structural changes imposed by the IFI which are anti-people and against the very spirit of constitution of our country, which declares our country as Sovereign Socialist, Secular Democratic Republic. The primary responsibility of our government is for a responsible, prudent management of financial resources. Unproductive use like spending crores of rupees on advertising to let people know what good the government is doing for them is totally useless and done to gain political mileage, must stop. When some good reaches people, they know it; it doesn't need to be advertised. The provision of health care, basic nutrition and education are the basic building blocks of a healthy and progressive society. Malnourished people unable to receive health and educational services are in no position to improve their own well being or contribute productively to the nation. Top priority is to be given to these sectors and govt. should strive to be able to provide it as fundamental rights/ Human rights. Power of people at grass root level, true democratic setup and transparency in government functioning are some of the basic requirements for sustained and broad- based socio-economic growth and transformation. (Dr. Vineeta Gupta) 'India and World Bank' World Bank Group website, in-country brief.pdf 'India pays world Bank more than it receives' Indian Express dated 25.9.98 'Punjab rations privileges as 67 paisa of each rupee spent on establishment' Indian Express dated 22.5.99 'Punjab has highest per capita debt' The Tribune 4.10.99, and editorial The Tribune ' Cash crunch in Punjab' 'Punjab bankrupt' The Tribune dated 11.12.98 'CAG raps Punjab Government' The Tribune dated 2.8.99 'CAG finds health services in Punjab in poor shape' The Times Of India dated 18.9.99 'Status of women poorest in Punjab' UNI news coverage 8.3. 99 'Sex ratio declining in Punjab due to foeticide' Indian Express dated 30.11.99 "Women, child health in Punjab 'appalling'' Indian Express dated 17.3.98 Page 303 'Constitutional law of India' by Dr. J.N Pandey 'Hike in charges: patients desert hospitals' The tribune dated 3.5.99 "Family planning drive goes up in the smoke" Indian Express dated 23.2.99 "Funds misappropriated" UNI release dated 13.11.99 " Warrants against 6 in medical scam" The Tribune and "Arrest warrants against 6 health officials obtained" Indian Express dated 15.11.99 Report of Deputy Accountant General, Civil Department, Health and Family Welfare Project Appraisal Document, India , Reproductive and Child Health Project, dated 29.4.1997, Report No. 16393-IN Project Appraisal Document, India , Reproductive and Child Health Project, dated 29.4.1997, Report No. 16393-IN Reproduction and Child Health Program, Schemes for implementation, Oct 1997, Department of Family Welfare, ministry of health and family Welfare, Government of India. Certificate of Registration Of Societies , No. 2794 of 1998, Registrar of Firms and Societies, UT Chandigarh Letter no s/99/423 dated 14.10.99 of civil surgeon to vigilance authorities, 'kharid'/99/254 dated 26/7/99, Kharid/99/285 dated 5.8.99 and RCH-Pb-99/4842 dated 4.8.99 of director Health to Civil Surgeon Sangrur. Indian express dated 17.8.99, 15.9.99, 27.9.99 10.10.99 16.11.99, 17.11.99 Order No. 212 dated 7.9.99 of Special Judge Patiala. FIR no 62 of year 1999 and DDR No. 7 dated 19.11.99 Letter No. 4/1594 dated 19/1/99 Letter No. RCH Pb-99/111-118 dated 24.3.99 Letter no RCH Pb-99/147 dated 29.3.99 WB approach/htm-corruption: a major barrier to sound and equitable development Robert W. Cox, Production, Power, and World Order, Columbia University 10 11