PUCL Bulletin, September 2002

Punjab Govt. Commission for closure of World Bank funded health care project
-- By Vineeta Gupta, General Secretary, Insaaf International

Also see, Improved Services or Abetting Deaths


The State Public Sector Disinvestment Commission has recommended to the State Government to wind up World Bank Funded Punjab Health Systems Corporation (PHSC). It vindicates the stand of Insaaf International since the beginning of this project that PHSC was created by domestic rulers to engulf the funds taken as loan from the World Bank. Agenda of the World Bank was to heap the debt without going into viability and impact of this project on the poor people especially women, to serve its hidden agenda of socio-economic subjugation. In my meeting with World Bank official in 1998 in Washington DC, I had pointed out that the setup and system including the officials to manage the PHSC remain the same as the previous state health sector which was projected as failure necessitating formation of PHSC, clearly indicating that the target of neither World Bank nor the State Government was to improve health care system.

Now when the loan installments are almost over and corrupt officials and rulers have pocketed the money, the PHSC is recommended for winding up. People have ended up with more debt and worsened health services. Insaaf International will soon launch a campaign for accountability of the failure of the project and fixing of responsibility at state and World Bank level. Insaaf international time and again brought the malfunctioning and adverse effects of PHSC on health care services but the visiting World Bank Team always showed its 'satisfaction', covered in the media. Recently, the World Bank extended the loan as result of its 'happiness' over progress of PHSC.
Insaaf International in coordination with World Bank Bond Boycott (Center For Economic Justice, Washington DC) had released a report " World bank Funded Health Care- A Death certificate for Poor" in September 2001 exposing the functioning of PHSC.

Background
Through a project called India-State Health Systems Development Project II, in which the World Bank lent US$106.1 million to India for health sector reforms in Punjab, the Punjab Health Systems Corporation (PHSC), a Para-state health organization, was created to replace the existing public health system.
The stated goal for the PHSC project was to improve the performance of the health care system through increased quality and effectiveness as the state health services were projected as failure. The ultimate goal of the project was to improve the health status of the people, especially women and the poor. What it has done is exactly the opposite, mainly because of the changes required by the World Bank in the structure of "user fees" charged for health services.

PHSC resulted in increased corruption, enhanced user charges adversely affecting poor and women, lack of transparency and accountability and increased debt burden on the people. Unable to afford private medical care and decreased access to state health services, the poor were pushed towards quacks and superstitious methods of treating their medical problem, adding to morbidity, mortality, spread of communicable diseases like AIDS, Hepatitis-B, and increased drug resistance etc.

The Times of India dated 4.6.02 reported that Punjab Health Systems Corporation (PHSC), Punjab Financial Corporation (PFC), Sugarfed, PAIC, Punsup and PRTC have been recommended to be wound up. In case of other major corporations like Markfed, Milkfed, PSEB and PSCB and others, which are to be retained, the commission has recommended that these be restructured by right sizing through a Voluntary Retirement Scheme (VRS) or retrenchment of excess staff.

In case of procurement agencies like Markfed and Punjab State Warehousing Corporation (PSWC) the allocation of mandis for procurement, which are reshuffled every season, and allotment of rice mills in case of paddy, are to be made permanent to curb misappropriation of paddy, a serious problem in the state. Two other state procurement agencies, Punjab Agro Industries Corporation and Punjab State Civil Supplies Corporation (Punsup) have been recommended for winding up.

In case of Punsup all its assets are to be handed over to the food and civil supplies department. In case of PAIC the commission has recommended that it stop procurement activities pending its closure. The commission has recommended the restructuring of the Punjab Infrastructure Development Board (PIDB) into a trust to administer the Punjab Infrastructure Development Fund (PIDF) and the Punjab Infrastructure Initiative Fund (PIIF). The renamed and reoriented Punjab State Industrial Development Corporation (PSIDC) is to function as the secretariat of the trust. PSIDC is to be renamed as Punjab State Infrastructure and Industrial Development Corporation (PSIIDC).

In case of Punjab Health Systems Corporation (PHSC) the commission has recommended that it be wound up when the funds of the project stand utilised. Gains of the project to be consolidated by the taking over of PHSC assets and liabilities by the directorate of health services and family welfare.

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