A balance between public and private is required

  • Mark Tully, Hindustan Times
  • Updated: Sep 13, 2015 21:55 IST

Private versus public, should the private sector or the market provide services — that hoary debate emerged again last month in two sectors of the economy, health and education. These are crucial sectors if India is to correct its lop-sided growth and grow inclusively.

In the health sector the Niti Aayog criticised the government’s draft health policy, which has emphasised the importance of the public sector. The policy has suggested “it would be desirable but ambitious” for India to aim at spending 4% of GDP on health. Most of that money, the policy recommends, should be spent on “public providers” with the private sector’s role limited to “supplementation”.

The Niti Aayog has argued that the private sector should play a central role in the provision of health services. No surprises there you might say, seeing that the vice-chairman of the Niti Aayog, Arvind Panagariya, is routinely described as a “noted free-market economist”. But bearing in mind that the present public health provisions have given India among the highest rates of mortality from diarrhoea, pneumonia and tuberculosis, it would be wrong to dismiss the Niti Aayog’s view as free market fundamentalism.

It was this question of the public sector’s ineffectiveness which was exercising the mind of the Allahabad High Court judge, Justice Sudhir Agarwal, when he ordered the Uttar Pradesh government to insist that all its officials should send their children to government schools. He said “only then would government servants be serious enough to look into the requirements of these schools and ensure they are run in a good condition”. This suggestion appears to be wholly unrealistic. But the judge has made an important point. If the upper echelons of Indian society had to rely on public health services and schools they would use their influence to make sure the services improved.

One of the theories which underpins the argument for the private sector is that it is more effective, less wasteful and less costly. This is by no means proven.

France and Britain rely heavily on public health services but they spend a smaller proportion of GDP on health and get better results than America with its private sector model. In India the private schools patronised by the top tier of society do generally outperform government schools. Lower down the economic scale there is real reason for doubting the benefits of private education. A few years ago an educational expert in Chennai, Balaji Sampath, told me that the attraction of English-medium education was luring poorer parents away from government schools, where the medium was Tamil, to inadequate English-medium private schools. The consequence of this was, he said, “the children from inferior English schools emerge knowing neither English nor their mother tongue although government schools have better trained teachers, better facilities and are free”.

What about corruption the bugbear of India? Is private necessarily less corrupt than public? A recent Reuters investigation found that in private medical schools “patients pretending they are sick and doctors posing as faculty are routine”.

The highly dubious accreditation process for private medical schools undermines another claim often made by proponents of privatisation in any field — the claim that it gets the government out of that sector. But in health and education the government, as guardian of the public interest, has a duty to protect citizens from fraudulent or incompetent private schools, universities, hospitals and other health services. Some argue that the inspectorate can also be privatised. But then there is the question posed long ago by the Roman poet Juvenal: “Who will guard the guardians themselves?” There would have to be a government inspectorate to guard a private inspectorate because privatisation isn’t a cure for corruption.

So in the end whether the Niti Aayog has its way or the draft health policy prevails the problem of the inefficiency and dishonesty undermining government functioning will remain. Some might think it best to deal with that problem before deciding the public private debate. When that debate comes it shouldn’t degenerate into a slanging match between private and public. A balance between the two should be sought.

The views expressed by the author are personal

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