Sunday, 1 November 2015

Politics of Privatisation and PPP in Rajasthan: What are the risks?

Nesar Ahmad

Recent policy developments in the state

The BJP government in last almost two years has brought in some very interesting policy and legislative changes in Rajasthan. Let us have a look at some of the recent policy and legal changes in the state of Rajasthan. Below is a summary of some of the recent developments:

First changing the central labour laws in the state to make it easier for the industries to retrench the workers, make it more difficult for the workers to unionize and removing the compulsion to implement the Factories Act for most of the industries.

Then bringing a bill for not implementing the 2013 Act on land acquisition and rehabilitation and resettlement in the state and fast acquisition of land of the farmers without their consent and without the social impact assessment, which is now put on hold but can be again brought in any time. Beside, the state government has also passed its own Special Economic Zone Act.

Then bringing a draft policy for introducing PPP in secondary schools and efforts to give the select schools to the private sector.

Then a decision by the cabinet to hand over 90 primary health centres (PHCs) to the private players and later handing 300 PHCs and one Community Health Centre (CHC) to the private companies.

Handing the anganwadi centres to the private companies as Nand ghars.

These are some of the examples of the steps taken by the Bhartiya Janta Party government in the state of Rajasthan, which indicate a certain policy direction. They indicate the state government’s immense trust on the private sector and the intention to protect the interests of the private sector companies. This becomes even clearer when one looks at the list of the members of Chief Minister Advisory Council in the state which replaced earlier State Planning Board. The CM Advisory Council is full of the big industrialists of the country.

The state government seems to believe that by giving all kind of waivers to the private sector (changes in the labour laws) and giving them various facilities (efforts to make the land acquisition easier) will bring lots of national and foreign investment in the state which will ensure fast economic growth, which in turn would create employment. The upcoming Resurgent Rajasthan, in which big investors and industrialists from the country and abroad are invited, is also an effort in the same direction.

At the same time the argument given in favour of privatization of social services like health, education and anganwadi centres is that the government has not been able to run these services efficiently and the private sector can do a better job. Therefore, privatization of these services would lead to better service delivery to the masses.

Growth at what cost!
There is a need to scrutinize these arguments critically. Is it necessary to give all kind of waivers to the private sector the attract investment? Can there be economic growth only when labour rights are curtailed and farmers’ lands are taken without their consent? What is benefit of the jobs created by such economic growth (if at all jobs are created) when the workers would have no job guarantee and no basic facilities and safety at the workplace? How can the negative impacts of industrialization on environment and society be checked without having the social impact assessments of the projects? Is the fast economic growth as necessary that the government can curtail workers’ and farmers’ rights for it?

And does the fast economic growth actually lead to employment creation? If we look at the statistics, there has been fastest economic growth in the county during the 10 years of the United Progressive Alliance (UPA) rule led by Manmohan Singh. On an average the Indian economy grew at 7.6 % per annum during the UPA rule. However, the employment increased at slow pace of 0.5% per annum during this period, as per Economic Survey 2014-15. Not only this, the unemployment rate also remained at the level of 2% during the decade.

Is private sector really better in service delivery!
Now the other aspect of the privatization policy of the Rajasthan government that is privatization of basic social services like primary health, education and anganwadi centres should also be examined. Are the private schools and private health centres better than the government schools in providing quality services to the people? But we will also have to look at the available budget, availability of the teachers, doctors, nurses and other staff at the government heath centres and schools. The government health centres suffer from vacant posts of doctors, nurses and other technical staff while there are very few teachers in the government schools in the remote areas. The status of basic infrastructure in the government health centres and schools is also quite well known. It is meaningless to compare the private and government health centres and schools without ensuring these facilities.

The budget for health and education in the country and the state, though seems to be very high, is very low compared to the gross domestic product of the country and the state. Both at the national and state level the allocation to the education sector is slightly more than 3% of the GDP and allocation to the health sector is slightly more than 1% of the GDP. The government’s commitment on various forums is to provide 6% and 3% of GDP for education and health respectively.
Most of the education budget in the state is directed towards the primary education. The budget for secondary education is very low and budget for higher education is almost negligible. This year (2015-16) the health budget in the state is Rs. 9416 (including the budget for the centrally sponsored schemes), which comes to little more than Rs. 1200 per person. It should be noted that this budget includes salaries as well which is large part of the health budget. Obviously there is not adequate budget for the social sector schemes.

Also, the private companies have this clear motive of making profit and not that of serving the people. For example the state government has allowed the private companies running the state PHCs to charge the people for those services which are not provided on the government PHCs. This policy provides the private sector with a ready market for their services and makes it beneficial for them to run the PHCs.

Also the most important question is, if the private companies have to provide services to the people they can do so in addition to the government efforts. Why they must try to replace the government? They can run the schools, health centres, and crèches for workers children at free and/or affordable costs for the poor people without taking over the government run schools and PHCs on part of their corporate social responsibility.

The politics of PPP
The privatization of basic social services in the name of Public Private Partnership will have larger political implications. There is hardly any evidence that shows positive outcome of the privatization of services in terms of increased access of the people to these services. On the other hand the privatization may lead to increasing cost of these essential services for the people as this would lead to further commodification of these essential services. The commoditification essentially means that the services like education and health are considered at par with any commercial service which can be provided commercially in the market.

Also the increasing privatization of the essential services and policy and legislative changes favourable for the private sector indicate the increasing role of and direct intervention by the private sector in the policy making. The CM Advisory Council is full of the big industrialists and government is listening to their suggestions and ideas. This is not necessarily in accordance with the true spirit of the electoral democracy in which people elect their government to make policies and legislation.

In conclusion, the move to privatize the basic social services and the greater emphasis on PPP and the favour provided to the private sector may not be able to achieve their stated objectives. On the other hand there is a real threat that these policy and legislative changes may deprive the poor workers and farmers of their rights and can push them in further disadvantageous position, while the public sector social services available to them, in whatever form and quality, may also get far from their access. This may lead to further marginalization of the poor people in the state.

First published in November issue of PUCL Monthly Bulletin 

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