The than any other sector. At the dawn

The 21st-century private sector has now been coded as the engine for developmental growth. The
Service sector is an aid for the social-economic growth and development of a country. It is today the
largest and fastest growing sector globally employing more people and contributing a large share to
the output than any other sector. At the dawn of India’s independence, the private sector started to
assume an increasing role and responsibility in rendering services. After 1991, with the
liberalisation of economic policies, India has been able to achieve higher services and better
investment from private sector and the entire community and personal services like health,
education, job creation, communication, transport etc contributed nearly 11.1% of GDP in 1994-95
with greater share of services from the private sector than the public sector.

There are many reasons for the efficiency of services provided by the private sector over the
public. Private sector organisations work in competition between individuals and ideas. Their
motives are concentrated primarily in profit making. They market their goods and render their
services in order to attract customers. These organisations are free from both legal and political
constraints unlike the public sector. They are free to manage and are capable to take risks. Private
sector organisations are driven by distinct goals and responsibilities to their clients. They are free
from financial constraints and are flexible in making decisions according to the situation. Though
the motives of profit-oriented private sector differ from that of the welfare motive public sector, it is
crystal clear that the services rendered by the private sector are better than those of the public sector.
The key dimensions of Indian economy i.e. health, education and job creation also have a greater
contribution to services from the private sector.

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Health: India trains more doctors, provides the largest number of emigrant doctors, and
tertiary health care system than almost any other country. It is evident that more than 70% of the
hospitals in India are run by the private sector. In recent times, the private sector has been playing a
major role in medical education, medical technology and diagnostics, manufacture and sale of
pharmaceuticals, hospital construction and provision of medical services. Though the cost of the
private healthcare system is about 4 times greater than that of the public healthcare, 72% of
residents in rural areas and 79% of residents in urban areas are still using private services because
of their better quality services. Private healthcare in India has quick access to treatment, better
institutional deliveries and provide intricate specialist services than government health system.
Many non-residents from the Middle East, Africa, Pakistan, and Bangladesh are flying to India for a
liver transplant or complex paediatric cardiac surgery – procedures that are not done in their home
countries. Others from the United Kingdom, Europe, and North America are opting for Indian
private hospitals for efficient, quick and cheap orthopaedic procedures or coronary bypasses.
Despite high sophisticated medical education, training and services from the private sector, there are
many bottlenecks in rendering health care to people of India. A large section of the population
doesn’t have an affordable access to good quality healthcare. Firstly, though profit-motive private
sector provides better services, many of them are indulged in malpractices by selling substandard
and even counterfeit medicines, receiving commissions for referrals, prescribing unnecessary drugs
and tests, needless hospital admissions and cases of manipulating the length of stay are also
detected. Secondly, it is because of the loopholes in the services of the public sector. At present,
India is one of the fastest growing economies in the world. It spends only 1.3% of GDP on public
health which is portrayed the lowest among the BRICS nations. The main reason for this is a highly
inadequate spending on infrastructure and an acute scarcity of trained manpower.

There is an urgent need to revamp the health system design and make it transparent and
accountable to people at reasonable cost. It is also essential to regulate the private health system.
The first design priority must be to increase public expenditure on health with the active

participation of state governments. An incursion of funds to meet the various technological,
infrastructural and trained personnel deficiencies is urgently needed. The majority of the population
in India lives in the rural areas and there is a dire need to strengthen rural public health care systems
immediately. Countries like Japan and China saw a rapid explosive growth since the second decade
of the 20th century because of higher investment in health and education. In the second design
principle, the government can either work on taxation levels to fund health services or by providing
mandatory health insurance to people at large. Various countries have worked on different health
system models. Britain’s National Health service is an example of a largely tax-financed health
system while Germany’s sickness fund is largely reliant on mandatory health insurance, and
Taiwan’s medical smart card are hugely successful models. The third most crucial design principle
is that the government should play an active role in designing and supervising the entire health
system, instead of focusing only on the management of a health system owned by itself. The
government has to provide incentives to insurance for health. Apart from this, the private sector also
has an equal role in developing health system. Despite the varied motives of the private sector from
the public sector, there is a huge responsibility in making private services genuine to people. A
better solution might be to impose greater social accountability on private providers, making a
certain proportion of private services available to the poor. This can be made efficient through the
PPP model.

Education: India has more than 1.5 million schools with about 250 million students enrolled
accounting to one of the largest numbers of enrolments in the world. The most striking feature is the
role of the private sector, which operates 25% of the 1.5 million schools but accounts for more than
50% of the total enrolments. Though Government of India has been increasing provisions of
elementary education through RTE, Sarva Sikhsha Abhiyan, more than quarter enrolments in rural
India are in private schools. This is primarily because of its better services. Private schools have
better infrastructure and most of them have their classrooms integrated with White board, projectors
that act as audio and video teaching aids which are essential for the physical and mental
development of the child. They accord for more trained staff as per the contemporary needs in
education. Private schools use different hiring standards which have strict guidelines for special
education teachers. Recent developments of private institutes is their approach towards
psychological development of the children. Many incentives like providing counselling for a range
of issues affecting children and adolescents, conducting assessments in learning, social, emotional
and behavioural domains and are providing assessment for overall development. Private schools
cover the entire curriculum and offer extra-curricular activities like science fairs, general knowledge
sessions, sports, music and drama for holistic development. Besides “chalk and talk” methodology,
private educational institutes are using ICT for effective learning support, self-learning,
instructional teaching, and assessment services. With the increasing emphasis on communication
skills and personality development assessment for selection into various occupations, the
curriculum followed by the private sector is more ahead than that of the government institutions.
According to NCAER report 65% of private school students are able to meet class tow-level
reading criteria when compared to 45% for government school students. Most of the private schools
have smaller class sizes. One of the key points of private institutes is individual attention. On the
other hand, public schools are characterised by larger class sizes minimising individual care and
attention. Private schools maintain better hygiene, sanitation and environment than government
schools which could safeguard the health of the students. Most of the government schools in India
lack basic requirements like toilets and drinking water. In this case, if a student wants to go to
washroom he/she has to walk back home or take to another means. The channel cited is one of the
major reasons for high drop-out rate of girl students. Many government schools have not been
renovated since a long time. Most of the government schools in rural areas are not proper schools

but confined to one room. Private schools are also providing certain accommodations like extra
time on tests and assistive technology which is a supportive aid for students developement. Pranab
Mukherjee, former President of India praised the role of private sectarian education and economic
growth of the country. Inspite of the fact that the private sector provides a greater share of education
services, it does not eliminate the demand for the government to play a stewardship role to ensure
quality education.

Job creation: Private sector is contributing lions share in job creation in India. It is enabling
jobs for young people on a sustainable basis. According to World Bank, 9 of every 10 new jobs are
created by the private sector. According to 2001-02 statistics, as far as employment is concerned,
the share of the private sector was 51.2% against 44.3% of the public sector. The private sector is
creating more jobs through IT which has led to the massive employment generation in India. IT
sector creates employment directly to 2.8 million and indirectly to 8.9 million people. NASSCOM
portrays the Indian IT workforce will touch 30 million by 2020. Nitin Gadkari (minister for road,
transport and highways) says that driverless cars would lead to loss of employment and that the
country has a shortage of 2.2 million drivers so these driving skills could generate employment. But
technology has created more jobs according to 140 years of data. This new inclusion of jobs would
create more jobs for people at large than destroy it. Apart from this, the private sector is also
providing jobs in the telecommunication sector to a large section of the population. With the
emergence of electronic media, the telecom industry has become one of the fast-growing sectors
with wide employment opportunities. India, trying to create the biggest digital market in the world,
a cashless society. For this private banks are increasing setting open employment opportunities.
Private sector with global transportation technology has been an emerging sector in the recent
times. Likely, Uber and its Indian counterpart Ola have created a million jobs as now in India we
have 650 million mobile phones, which allowed people to get service on demand. E-commerce
business giants in India like Amazon and Flipkart are providing employment to more lakhs of the
population every year. In recent times, India has made a niche for itself in the outsourcing world.
India renewed for its technical talent. It is producing more English-speaking IT graduates every
year and is a destination for many jobs from low-end work like data entering into high-end research
engineering. USA, UK, Australia, have a major share of job outsourcing in India. This is not only
providing employment but also India is reaching global markets and improving its economic status.
Thus, technology is a huge job multiplier.

Thus, the private sector made a striking move in contributing a herculean amount to the three
main economic dimensions i.e health, education and job creation. It is also marking its boundary of
better services in various fields like communication, transport, insurance, social and community
services. It stood as a boon to the Indian economy and its people directly or indirectly. The entry of
private sector post Independence laid a basis for a realistic recognition of the needs and interests of
the population. It directly impacted the country and life of people in many ways. It increased the
quality of life, improved social life of the middle-class Indians, major effort in increasing innovative
techniques to meet the varied ends, effected increase in research and development, higher education
facilities, better health outcomes, etc. Despite better outcomes of services from the private sector, it
is not free from stains. There are loopholes in corruption, malpractices in health and an over-riding
cost for certain services. These slight cracks can be filled with gold through the PPP model which
would regulate the services of the private sector and at the same time the collaboration would
provide better services. In spite of limitations, private sector undoubtedly has an upper hand in
rendering best services to the people at large.

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