World Bank 'uncovers India fraud'

Robert Zoellick said the World Bank would boost oversight of projects

The World Bank has said it has uncovered "serious incidents of fraud and corruption" in a review of five health projects it has backed in India.

The multi-million dollar projects, some of which date back to 1997, involve HIV/Aids, malaria and tuberculosis.

"The probe has revealed unacceptable indicators of fraud and corruption, said World Bank head Robert Zoellick.

India's government said it took the findings seriously and would punish anyone found guilty of wrongdoing.

The evidence of fraud was revealed in a newly released Detailed Implementation Review, begun by the World Bank in 2006.

That review was prompted by an investigation into a World Bank-backed reproductive and child health programme in 2005, which found evidence of corrupt practices by two pharmaceutical firms.

'Eradicate corruption'

The projects involved in the latest review included a $193.7m (£99m) programme to tackle HIV/Aids, a $124.8m tuberculosis scheme and a $114m malaria programme.

The World Bank has said it and the Indian government will cooperate to ensure the scrutiny and transparency of ongoing and future projects.

Mr Zoellick, who took over as World Bank president in July, said he appreciated the Indian government's "resolute commitment" to pursuing criminal wrongdoing.

He said: "These problems have to be fixed. I am committed to cleaning this up. I have spoken to Finance Minister [Palaniappan] Chidambaram and he feels the same way.

"The results of this World Bank Review show we must keep pressing to eradicate corruption from our projects. Fraud and corruption are not acceptable."

A statement from India's finance ministry said: "Necessary action under the relevant laws, rules and regulations would be taken against those suspected of wrongdoing and, if found guilty, they will be visited with exemplary punishment."