Wockhardt Govt Hospital

In Palanpur last week, the Gujarat government signed up with Wockhardt to manage a local government hospital. In Delhi, as a report in this newspaper has spelt out, Tata Consultancy Services now organises and manages the national corporate database for the department of company affairs, so that information on over 800,000 companies is readily available on the Internet. TCS has also developed in Andhra Pradesh, and perhaps elsewhere, a method for monitoring work done under the national rural employment programme. In the knitwear-exporting town of Tirupur in Tamil Nadu, a public-private partnership project for improving water supply has become a landmark. And in Delhi, the Bhagidhari (government-citizen partnership) system has given public-private partnership (or PPP) a broader context.

Some 15 years after PPP was first formally conceived in Britain, the idea has spread to several countries, and to international organisations like the World Health Organisation, which now works with non-governmental bodies and private charities almost as much as it does with governments. As elsewhere, in India too, the original idea was to get better value for the government's money by involving efficient organisations from the private sector""as with the construction of national highways, in which private companies have undertaken to build and operate toll roads with the help of a capital subsidy from the government (and as things have turned out, this subsidy is quite small). The idea has spread to the use of private finance to develop and manage public utilities, as with the modernisation of the major airports, so that the size of the government's budget is not a limitation when it comes to investing in infrastructure. In cases like TCS, it is simply a matter of using the expertise available with non-governmental bodies""outsourcing therefore becomes the chosen method, as with the issue of permanent account numbers for income-tax payers. The time may have come now for taking the idea several steps forward, given that the principal problem with government programmes for the provision of essential social services is no longer money (budgetary outlays have been growing by leaps and bounds), but the quality of effort by government employees. The idea of a voucher system for schools (parents get a government-paid voucher, which they can present to the school of their choice in return for their child's education) has been frequently discussed, but remains sensitive, perhaps because it seems to undermine the whole idea of the government as a provider of a basic service. The truth though is that public schools will merely be asked to compete with others, with the consumer of education being given the choice and the citizen thus being empowered. Similarly, the idea of handing over government hospitals, often sub-optimally managed, to local citizens' bodies for their management was first tried in Bhopal some years ago, but has not found too many takers elsewhere; the Gujarat experiment with Wockhardt, at Palanpur, is therefore one worth watching.

Such experiments are not always a success, of course. Government subsidies to privately-run hospitals in Delhi, offered in the form of low-cost land, were supposed to ensure that a prescribed percentage of beds would be offered to poor patients, at little or no cost; but the hospitals took the subsidised land and then reneged on their part of the bargain. PPP experiments can also have a rocky record, as with the Bangalore Agenda Task Force, which began with great promise in the late 1990s but was disbanded five years later, when a new state government took office.

The starting point for all such experiments is recognition that the government system is often unable to deliver quality services at an optimal cost. Try getting a driving licence in most parts of the country, and the point becomes obvious. At its root, the reason is that the risk-reward relationship does not work very well in the government; there are almost no penalties for failure or non-performance, and few rewards for success. The record so far with PPP projects seems to suggest that the results are generally more satisfactory. That is good reason for widening the scope of such projects.