Public Private Partnership

After India’s independence in 1947, economic conditions across the country were devastating. The brutal effect of the British Imperialism on the economy was fairly evident by the frequent famines and the high fatality rates. Partition of India not only divided it on the basis of land but also in two economic zones. Therefore, the government underwent a hard time coping with the economy deficits and poverty in India. The period between 1947 and 1991 saw the pre-liberalization phase. During this period the public or the government sector failed to meet the demand of the nation to overcome its problems with reference to the poverty and bitter financial status. Jawaharlal Nehru, then Prime Minister of India, devised a method of Mixed Economy (capitalism combined with government intervention which consequently led to initially high growth rates but which by the end of fourth decade converted to low growth rates and a license obsessed restrictive state). License Raj proved to be unfruitful because the foreign goods were unable to reach the market and the private companies were restricted to produce and to make foreign trading. But the beginning of 1991 saw the post liberalization under P.V.Narsimharao. Liberalization eased the restrictions over the small scale industries, the taxes and other price controls promoting policies like foreign direct investment. This led to the expansion of private sector more than the public sectors with the prime motive to earn profit. But this policy of liberalization helped to improve the economic statistics of the nation. The public and private sector are often considered to be contradictory and sometimes complementary. Since both the sectors helped in increasing the country’s capital therefore there was a need for these two wings to join hands and work together which is now known as public private partnership. Under this relationship, public sector gives away certain cooperation to the private sector in terms of land and infrastructure and the private sector gives high capital profit by producing superstructure. Similar partnerships like BOLT (Built Operate Lease and Transfer) and BOOT (Built Own Operate and Transfer) serve the same purpose. BOLT and BOOT are long term schemes under which private party is given a certain area of land on which it can establish private firms and produce goods, capital and profit and after a certain period of time as decided by the Government, the private sector has to transfer the control of the industry to the Governments hands.  Public sector alone is a victim of Red Tapism that involves excessive bureaucracy and low efficiency in decision making while private sector is fast at decision making and is highly efficient. Gradually with increasing privatization, globalization also came to picture. Up till then the GDP of the country increased from 16% to 47% by the end of 2008-10. Globalization included the FDI which made India a preferred centre for the same. Public sectore kept major functional areas such as Health, Railways, Defense, Infrastructure, Land allotment etc under its control and the private sector gained access to the superstructure development, Industrialization, Globalisation in terms of export and import. But in the recent years the areas under Public sector have open handedly welcomed the private intervention, for example, infrastructure under National Highways Authority of India and Midday Meal scheme. In the field of Health concerns, various NGO’S such as C.R.Y., Transparency International, Common Cause, Naz etc have exemplary contributions. Corporate Social Responsibility is the policy under which the private firms are obliged to pay back the cost of profit in the form of welfare and developments. This type of relationship has not only bought the two sectors closer but also a shared the responsibility to take the nation to appreciably higher levels of economy and development so that India can rise as a world power in terms of Financial Stability by the end of 2025. Therefore the Public and Private partnership is proving to be a boon for the entire nation and world facilitating export and import, earning foreign currency, providing larger employment and developing science and technology and consequently taking the country to the higher summits of success.