This Pandemic Has Accentuated The Private Cost Of Public Failure

Context: The fissures and failure of public services delivery in India has led to the people (other than poor) exiting from the state and creating their parallel structures, which further reduces the state’s capacity to deliver.

Poor state of public healthcare system: A display of poor state capacity

• Low ratio of doctors/nurses to population: One doctor for every 1,511 people, against one for every 1,000 people recommended by the World Health Organization and India has one nurse for every 670 people against the recommended 300.
• Regional inequity in the availability of doctors/nurses: Kerala has 65,685 doctors for a population of 35.6 million, whereas Jharkhand, with a population of 38.6 million, has only 6,837 doctors.
• Weak and unequally distributed medical infrastructure: Even in 2020-21, central and state governments spent just 1.8% of India’s GDP on health, against 1.4-1.5% of GDP earlier.

Implications of poor state delivery: Issues in the health sector equally applicable for other sectors such as education, general ease of living etc.

• Creation of parallel infrastructures: People who can opt-out, does so and create parallel infrastructures at a significant private costs. For e.g.
  • People cocoon themselves in urban gated communities, making sure that there are diesel generators to ensure the availability of electricity even if there is a power cut, sending their kids to private schools, buying vehicles to move around because the public transport is not up to the mark.
• Involves tax avoidance: Taxes collected by the central government fallen from a peak of 12.1% of GDP in 2007-08 to 10.6% in 2020-21.
  • This is because citizens seek out market-based avenues to fulfil their needs and pay lower taxes.
• Emigration: While the rich move towards private delivery of services, these are also not up to the mark (as seen in healthcare), leading to the emigration of the rich and further lowering the tax collection.
  • As per the Global Wealth Migration Review, published by New World Wealth, a wealth intelligence firm, nearly 7,000 wealthy Indians or 2% of our high net- worth individuals left the country in 2019.
• Increased inequality: In the long-term, one can foresee gated communities with their own hospitals coming up, soaking up medical resources and putting pressure on health infrastructure.