Why Public Private Partnership is blooming in India?

Public Private Partnership

The public private partnership model gained popularity in the late 1980s, as an alternative tool to address the infrastructural inadequacies and to assist the governments in overcoming the financial investment constraints. The public private partnership model or framework gained prominence or became popular in both developing and developed nations.

The Government of India defines the public–private partnership or PPP or 3P as a commercial legal relationship. Ziqitza HealthCare Ltd, a prominent healthcare and emergency service providing organization explains that public private partnership is an arrangement between a government, or statutory body or government owned body on one hand, and a private sector company or entity or body on the other hand, for provision of public services.

Ziqitza elaborates that the government of India recognizes several types of PPPs such as, Performance based management/maintenance contracts, Modified design-build (turnkey) contracts, and User-fee based BOT model. The country today stands witness to hundreds of projects based on public private partnership models in various stages of implementation.

The Government of India is committed to improving the level and the quality of economic and social infrastructure services across the country. In pursuance of this goal, Ziqitza HealthCare explains that the government envisages  a substantive role for Public Private Partnership (PPPs) as a means for harnessing private sector investment and operational efficiencies in the provision of public assets and services.

In the last one and half decade, India has witnessed exponential growth in PPPs, and has emerged as a leading PPP market across the globe. The credit for the framework’s adoption goes to the central as well as state governments for introducing several policies and institutional initiatives targeted at adoption of the PPP framework and to leverage its benefits. Ziqitza Rajasthanpoints out that the central government has categorically set up a Public Private Partnership Appraisal Committee to manage and streamline appraisal and approval of projects. ZHL Rajasthan states that the central government has set up transparent and competitive bidding processes to ease the process of PPP within the country. The government has also provided for cross sectoral support to the PPPs through viability gap funding, user charge reforms, project development funds, as well as institutional and individual capacity building.

Ziqitza Limited correctly points out that India’s healthcare system faces multiple challenges in terms of improving the quality of service and also ensuring equitable access to healthcare for all. India’s healthcare needs to strengthen itself to be able to tackle future epidemics and pandemics, and also be able to manage the disease incidence profiles. And this can only be addressed with concerted effort of both public and private sectors. Ziqitza Limited Rajasthan, points out that India has been suffering with healthcare inadequacies and this grim reality became more evident during the second wave of the COVID-19 pandemic. Unlike the first wave where the country was caught off guard, the second wave proved lethal due to lack of India’s preparedness, lack of adequate vaccines, oxygen, beds, medicines etc.

Ziqitza HealthCare limited points out that these glaring gaps in terms of lack of access to healthcare infrastructure, accessibility, availability of medicines, inadequate health facilities, etc. can be addressed through an effective and efficient public private partnership. Few benefits of PPP model in terms of strengthening the Indian healthcare system:

  • Expertise: The experience and management expertise synonyms with the private sector can assist in revamping public medical facilities.
  • Mutual Financial Benefits: The private sector can leverage its large funds to build healthcare infrastructure. Similarly, the public sector can bring in the required subsidies and accessibility.
  • Increased Availability: The public private partnership model will assist the government with required resources to make healthcare available for the larger masses.
  • Affordable Healthcare: PPPs high-volume, low margin strategy can help attain universal healthcare for all.

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