The Planning Commission has suggested that government schools, hospitals and other social services should be given out to private contractors just as PWD gives out contracts for making roads. Thinking is in the right direction. It is recognised that provision of these services through government employees is beyond redemption. People would be able to approach the government officials against deficient provision of these services by private contractors. Three-way friction between people, contractors and government regulators will provide better accountability than two-way friction between people and government providers.
At present government officials are both providers and regulators of government employees. Say, a government teacher is absent from school. Complaint has to be lodged with the same district education officer with whose knowledge and connivance the teacher is absent. Contractor system will help improve delivery of these services just as privatisation of distribution of power supply in Kolkata and Delhi has led to much improvement.
Yet, the fundamental problem of inefficient provision of government services is not solved. The Planning Commission had set up a sub-group on public-private partnership in social sector. Report of the group says that the problem of delivery is that government provision is monopolistic in character. The bureaucracy takes liberty to indulge in lethargy, corruption and high-handedness because people have no alternative but to put up with their misbehaviour. The report says that giving out to contractors should not be seen as privatisation. The control will remain with the government and contractors will have to follow the rules and directions given by the government. Providing services through contractors should be seen as administrative reforms rather than dilution of role of the government.
The main problem is that people have to bear with the highhandedness of the government employees. The solution will lie in dismantling government monopoly. Giving out provision of the services to contractors does not attain this end. Rather, government monopoly is replaced with contractor monopoly. Teachers appointed by the contractor may be just as inefficient, disinterested and corrupt as those appointed by the government.
The above quote further says that giving out services to contractors must not be seen as privatisation but only as a measure towards administrative reforms. Implication is that commanding and monopolistic position of the government will remain intact. Accordingly all problems associated with monopolistic provision will remain.
Competitive bidding
The Planning Commission says that competitive bidding in selection of the service provider will lead to improvement. I have my doubts. My experience is that government provision is better than private provision in certain sectors. Insurance agents tell that government insurance companies will generally pay full claims even though they may take longer time in doing so. Private insurance companies will try to pay less by using one tactic or other.
The Planning Commission says that “the monopoly like situation of a public service is kept under check through the process of monitoring and evaluation. This can be further supplemented through putting in place independent regulatory systems to protect the consumers interests.” True. But the same could be done with respect to the present government employees. They could also be kept under check by monitoring and evaluation. It may be as difficult to monitor the contractors. Contractors are able to get substandard materials accepted in government purchases by giving bribes as seen in the collapse of a foot bridge made for the Common Wealth Games. The same is likely to happen in contractor-led provision of health and education.
Replacing tyranny of the government by tyranny of the contractors is no solution. Indeed the two tyrannies could together sometimes empower the people just as dispute between two thieves exposes both. But that it will happen is not necessary. There is a greater loss. Focusing on minor improvements though the contractor route distracts our attention from the basic problem and actually perpetuates the same.
Today the responsibility of providing water is that of the government. The burden of health provision is upon the government. For learning also one has to knock at the door of the government.
World Bank data tells us that government expenditure on health in India accounted for only 17 per cent of the total on health. Situation in education is similar. The welfare mafia of government teachers and doctors has captured this government money. Now the commission wants to create another mafia of contractors to replace the mafia of government teachers. The need is to wholly dismantle the government services except for the very backward areas where private providers have not reached yet.
The government spending on social services too should be left to the people. The amount should be given out in form of cash vouchers to the people. They should be empowered to select providers. Focus must be upon improving the quality of private provision by regulation. Regulation of private schools is fundamentally different that regulation of government contractors because no government funding is involved. Let us not waste another decade experimenting with contractors and then finding that we have only fallen from the frying pan into the fire.
