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Budget 2020 and PPP Model

The Indian Government has released the 2020 national union budget on the first of February. We came to know about the economic investments of various sectors that our Government and its budget will focus on this year. To our delight, the medical education sector with this year’s education budget was given priority. The healthcare allocation saw an increase of 5.7% to Rs. 69,000 crore compared with last year’s Rs 62,659 crore, which is a good news for the general public. In an article published by Express Healthcare entitled “Healthcare Budget 2020”, Mr. Saju Bhaskar, Founder and President of Texila American University, rightly said:

“It is a good budget for the educational sector, particularly for the medical education sector going forward.”

The Indian Government also announced that the proceeds from the taxes levied on medical equipment through the Ayushman Bharat Scheme to boost the health infrastructure in Tier-II and Tier-III cities. These proceeds, along with the improved healthcare allocation, will enable further reforms in the sector and, as a bonus, create employment opportunities in the surrounding areas.

The Government also proposed to set up a sustainability-gap funding window to build hospitals and educational institutions in the public-private partnership (PPP) model, which will broaden the scope of medical care and education for the people. Mr. Saju Bhaskar proclaimed:

“The government focussed on addressing the prevailing gap in the Indian medical education system. And announced the most significant step by appending medical colleges with district hospitals on PPP Model (Public-private partnerships). By bringing more such PPP models, the cost of medical education will come down, become more qualitative and will help our country to address the demand for doctors. This will encourage more competition in the segment thereby enhancing the quality among medical institutions.”

The Public-Private Partnership Model

The PPP, defined by the Government of India in 2011, is an agreement between a government body and a private entity for the stipulation of public services or public property. This agreement is for the prerequisite of public services or property. Moreover, in this agreement, the private sector company either makes monetary grants or assumes responsibility for the administration for a particular period. Also, there is a well-defined risk-sharing between both parties. The private entity receives a pre-decided, performance-based payment.

In India, the private sector companies find it difficult to meet the funding requirements for building their infrastructure in seclusion while addressing the risks of the market, which are integral to building a sustainable infrastructure. Thus, Mr. Saju Bhaskar suggested:

“Structuring the partnership mechanism will allow private investors to come in. The new education policy should address the pressing issues of private investment, restructuring norms may allow more new private medical colleges to enter the segment. If the new policy can also consider allowing private institutions to list in the exchange, they can create private education loans that can fund students deserving.”

Consequently, the PPP model becomes an efficient, logical, viable, and compelling option for the Government and the private sector to choose to work together.  As per the Government, the PPP project is a long-term agreement or a grant agreement and hence hugely beneficial to both parties.

The Indian Government has initiated this model to provide better healthcare and medical education to the public by attaching medical colleges to existing district hospitals and seeking partnerships from private entities in a PPP model. As foreseen in this budget, this initiative is an innovative and practical decision to help patients and train students. We are sure that these decisions will go a long way towards ensuring better education, healthcare, and treatment options for the masses. We are positive about the measures taken in the budget to provide better education and healthcare for all as a priority.

Thus, the Budget 2020 and PPP model will improve the Medical and Medical Education System in India for sure. Obviously, “it is a good budget for the educational sector.”

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Will the Budget 2020 and PPP Model Improve the Medical Education System in India? The Indian Government has released the 2020 national union budget on the first of February. We came to know about the economic investments of various sectors that our Government and its budget will focus on this year. To our delight, the medical education sector with this year’s education budget was given priority. The healthcare allocation […]
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