Harness private sector

Harness private sector

Kant tells it like it is, government should stop operating infrastructure assets.
Amitabh Kant, chief executive officer of Niti Aayog, suggests that government should stop operating infrastructure assets. It is a suggestion that government must take seriously as it is stretched financially and even more so in terms of managerial talent. The answer to this challenge is to harness resources available with private sector through public-private partnerships (PPPs). India, a couple of years ago, had over 1,200 PPPs in various stages of development. Some notable success stories have been in transport sector, particularly airports and ports. These success stories need to be expanded and emulated in other sectors by working out sophisticated PPP models.
Kant feels even if transport infrastructure is the most obvious segment where government should give up management responsibilities, this idea can be extended to other sectors such as schools. Education is the single most important investment a government can make to harness India's demographic potential. The government's performance in education sector has been dismal as it has not demonstrated the capacity to deliver. Therefore, it is time to experiment with concepts such as school vouchers and scholarships, or getting the private sector to run government schools while strictly monitoring outcomes, to provide children from economically deprived sections the opportunity to access quality education.
India's PPP experiment, as Kant points out, has not always fared well. PPPs are primarily contractual agreements between government and private parties, where the latter are expected to bring to the table managerial efficiency and high service standards.However, the devil lies in the details. This means incentives need to be properly aligned to rope in the private sector, contracts need to incorporate sufficient flexibility to accommodate changed economic conditions, and transparency maintained to curb corruption. With these tweaks, PPPs can be a game changer in India.