'World Bank may further fund project'

NEW DELHI: India on Monday hoped that World Bank would resume funding for a child health programme, as the government has agreed to put in place measures to check corruption and take action against those involved.

"We have agreed to put in place corrective measures as well as take action against those responsible... but I am sure World Bank will find ways to resolve it," Finance Minister P Chidambaram told reporters.

The multilateral agency had stopped funding to the crucial second phase of the Reproductive and Child Health Programme (RCH), citing possible fraud and corruption in procurement of medicines.

It has also withheld loans to two other health sector projects until the corruption issue is addressed.

Chidambaram, however, said: "We are not happy that RCH-2 was put on hold...but I have conveyed my views to the World Bank President."

He said the Indian team, which would participate in the Spring meeting of IMF-World Bank in Washington, will discuss with a view to resolving it.

The RCH-I was an old programme and World Bank noticed some irregularities and government is now taking corrective measures and action against those involved, he said.

The World Bank, early this month, said it had put on hold funding of about $350 million to the second RCH programme and two other health sector loans - the Second National Tuberculosis Control Project and the Karnataka Health Systems Project.

World Bank strongly believes that corruption and leakages are a major development issue. For, they undermine the intended outcomes for which public money is spent, it had said.