Play regulator, let PPPs flourish. The state must master a balance.
They say it's the future of India. A future where private application and the community's commitment mesh with government money and regulation. A future with alliances driving obligations of the government, be it infrastructure—roads, ports, airports, power—or crucial social services like health, education, water and employment. And a future fuelled by a high-growth economy, in sync with the principles of India's noisy and participatory democracy.
But are partnerships—public-private or with NGOs and communities—the mantra for a new India? Well, it's been a mixed track record thus far.
| | | | The CAG says "NGOs do well only in dissemination of information, not in implementation". | | | | |
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As the stories across this special issue highlight, we are very early in the learning curve of partnerships. Some, like in infrastructure, have partly taken off, but a lot remains to be done. Experiences with other partnerships have been controversial and have come with heavy costs, as highlighted by attempts to privatise water supply and bring in private players in forestry. And while there are many examples of community initiatives in health and education, in the case of government, as a senior official put it bluntly, "We bureaucrats are sitting on our turf to the detriment of the country."
The problem, clearly, lies with the state's approach to partnerships. There's a lack of political will to forge meaningful partnerships with better accounting of funds and monitoring of services accruing to the people. As experiences with essential services like education and health show, the government needs to be the prime driver. But, unfortunately, it doesn't deliver, and fails in its responsibility to regulate—with disastrous consequences. That's why it has been argued by many that the state is using the fig leaf of partnerships to make up for its failures in providing essential social services.
It's no secret that government schemes have, by and large, failed to deliver to the people it is meant for, with huge leakages and corruption.
| | | | In infrastructure, the minimum time taken for a PPP to reach actual users is now 5 years. | | | | |
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As the
Outlook-Cfore poll of public schemes and partnerships in four districts around the country shows, a staggering 71 per cent of the 1,000-odd people surveyed felt that there was a high level of corruption in public schemes. Another 25 per cent felt there was some corruption. For those aware about community and government-NGO initiatives, the figures are telling: 69 per cent felt these were delivering better results. And a majority (56 per cent) felt partnerships brought more accountability to welfare schemes. Interestingly, when asked whether they would pay for community/ private schemes that ensure essential services like water, education, health, a majority (58 per cent) answered in the affirmative.
The verdict is clear: there's a disenchantment with outcomes of government schemes and an openness to partnerships. As Kalpavriksh's Ashish Kothari argues, what is lacking is quality. With the government keen on maintaining full control of partnerships, this generates little "ownership" among communities. Civil society, in most cases helped by public funding and overseas contributions, has been partnering various initiatives to improve living conditions and help neglected communities become aware of their rights. While there are many examples of positive partnerships to improve literacy or provide better healthcare and skill development, government is evidently not keen to let go. Vinod Rai, CAG, puts it in perspective: "NGOs do well only in dissemination of information, not in direct implementation." In a step forward, the government is now looking at PPP models for non-profit NGO involvement in schools and health.
So, what about the private sector? Traditionally, in good or bad times, the private sector has looked at "giving something back to society". Even if this altruism is driven by a desire to create goodwill and improve the quality of recall, it helps that the economy has been growing at breakneck speed for the past four years. Though it's early days yet, industry has been quick to forge ambitious partnerships in R&D/skill development—a crying need to improve employment.
Given the uncertain global growth scenario, it is also keen to invest in infrastructure, but is hesitant to do so without an enabling environment. In infrastructure, despite the government being a partner, the minimum time taken for a PPP to fructify, get implemented and reach actual users may take up to five years. In the case of road projects, barring land acquisition problems, it can take up to three years. As highlighted by Feedback's Vinayak Chatterjee, regulatory roundabouts, lengthy land acquisitions, lack of monitoring at the state level, and the absence of managerial intervention are impeding private investment in infrastructure projects.
Lay it up: New runway at Delhi airport
As things stand, PPPs in infrastructure are still dominated by roads, with limited successes in power, ports and airports. If anything, the recent brouhaha over the new Bangalore and Hyderabad airports only serve to highlight the continuing issues such PPPs face—even when they are finally up and running. And the battle over end-user charges at these airports doesn't seem to be over. Even though the government says there's "no option" but to woo private investment in infrastructure, there's considerable scepticism that its targets will be met: PPPs are expected to make up 44 per cent of the staggering $492 billion required for infrastructure in the 11th Plan period. In urban transportation and housing too, there are few PPPs as city governments prefer to go it alone—or completely outsource to private players.
To be sure, through reforms and concerted efforts to iron out policy kinks, the government has been striving to make partnerships more attractive for industry. The Planning Commission has formulated a model concession agreement, which has been endorsed and accepted by some states including Gujarat, Maharashtra, Karnataka and AP. For the roads sector, a tolls policy should be out soon. After years of changing and chopping, a more consistent regulatory environment—and contractual sanctity—is needed. "We see PPPs as an inevitable route...if you don't get private investment, the infrastructure deficit will only increase. This would impede growth, employment and welfare," avers Gajendra Haldea, adviser (infrastructure), Planning Commission.
The onus of implementing partnerships rests with the state governments. Here, the poor response from some states has seen considerable funds lying unutilised. This applies to many of the rural development projects in sanitation, rural roads and rural electrification. On the other hand, many states like Bihar, Gujarat, Tamil Nadu, MP are not only utilising the centrally-funded projects, but also putting their own resources to good use. While the central government has been using a carrot-and-stick approach of conditional access to funds—Maharashtra's recent repeal of the Urban Land Ceiling Act was one such example, driven by JNNURM—the ultimate driver of partnerships will remain the state. Clearly, the answer lies in educating more states about the benefits of partnership.
As for the future, a move to better evaluate government schemes is in the works. While it remains to be seen just how this will reduce corruption in the delivery of government schemes, any beginning would lend more faith in the system. More importantly, the government will have to master the balancing act of letting partnerships flourish while enhancing its regulatory role. This applies to all sectors of course, but to education and health in particular—where the state has to lead the way.
We found many positive stories around partnerships. Like a community effort to clean up dirty wells in Bihar, a thriving floriculture initiative in Assam, a successful initiative to set right Calcutta's creaky infrastructure, and a private firm that has mastered the art of making low-cost lenses used in cataract operations. For every success story, there are many of failed outcomes. The road ahead is clear. But it's going to be a long haul.