India is witnessing a shift in healthcare infrastructure as several public hospitals and thousands of crores worth of public land are being transferred to private entities under Public-Private Partnership (PPP) models. These agreements aim to modernize healthcare facilities and establish medical colleges, with the government offering significant financial support to private players.
Government Incentives and Policy Push
The PPP push gained momentum in 2017 when the central government and NITI Aayog, with support from the World Bank, encouraged private involvement in hospitals with fewer than 300 beds. In 2020, a viability gap funding scheme was announced, offering 60-80% of capital expenditure support from central and state governments. The model agreement also proposes shared operation and maintenance costs for the first five years.
Hospital Handovers and Leasing Public Land
While PPPs have already been implemented in areas such as dialysis and oncology, some states are now handing over entire district hospitals or public land to private operators on long-term leases, typically for around 30 years. Uttar Pradesh, Andhra Pradesh, and Madhya Pradesh have emerged as leaders in implementing PPP-based medical colleges.
Concerns About Transparency and Accountability
Despite promises of free treatment on reserved beds and expanded MBBS seats, critics point out that MoUs are rarely made public. States often fail to enforce conditions for free treatment, and concerns over opaque deals, weak government oversight, and lack of community involvement remain widespread. In the past, failed PPPs in Karnataka and Chhattisgarh led to hospitals being reclaimed by the state.
Limited Public Benefit and Soaring Costs
Activists argue that PPPs in healthcare often turn public health into a profit-driven enterprise. While government-run hospitals offer affordable care, PPP hospitals may offer only limited free services, with the bulk of treatment shifted to paid beds. Insurance schemes like Ayushman Bharat cover only inpatient care, often masking out-of-pocket costs for patients.
Unequal Access and Rising Education Fees
PPP medical colleges may increase MBBS seat availability but often come with high fees. In states like West Bengal and Gujarat, fees in PPP colleges are several times higher than in government institutions. Government quota seats in private colleges can cost ₹10–26 lakh per year, while management or NRI quota seats can exceed ₹1 crore, making them unaffordable for many.
Staffing Gaps in Government Hospitals
Many states cite vacant faculty and staff positions as a reason for PPP adoption. However, experts question how private entities will attract qualified personnel when government hospitals, which often pay more, struggle to fill posts. Faculty shortages remain high in many institutions despite being located in cities with abundant medical professionals.
Public Assets, Private Profits
In some states, PPP deals involve long-term leases for token amounts, such as ₹1 for 33 years in Gujarat. Governments also contribute crores in funding and land, while private entities collect significant tuition fees. Critics argue that this results in a double cost to the public — first through taxes spent on building the facilities, and again through inflated medical and education charges.
States Resisting the PPP Model
States like Kerala, Tamil Nadu, Himachal Pradesh, Goa, and Telangana have resisted PPPs in public hospitals. Public opposition has led to cancellation or modification of proposed PPP projects in several regions, including Goa and Madhya Pradesh.
Despite resistance and criticism, many state governments continue to promote PPPs as a solution to financial and staffing challenges. However, the growing privatization of public health infrastructure is raising questions about affordability, access, and the long-term impact on India’s public healthcare system.
