Private Sector participation in Health care in Rajasthan


Vinod Kumar Jain
Management Student
Aravali Institute of Management

India has a vast health care sector. Health care sector is broadly divided into the public and private sectors. Public health services consist of the following 'step-up referral' network of sub-centres, primary health centres, community health centres and district hospitals. Private sector includes private owned hospitals, medical laboratory, services from physicians, support staff, nurses, therapists, psychologists, veterinarians, dentists, optometrists, paramedics, pharmacists, or even a health insurance company.

The private sector in health care has grown phenomenally due to state subsidies in the form of medical education, soft loans to set up medical practice etc. this sector is now accounting for 70-80 per cent of all primary care treatment sought, and over 40 per cent of all hospital care.

When we talk about Rajasthan it is the on of the least developed state of the country. The role of the private sector is likely to increase here also as the people of Rajasthan continue to demand high-quality medical care. Furthermore, as per capita incomes increase people will increase the amount of money that they spend on private health care. A recent study estimated that for every 1 percent increase in income private health expenditures increased by 1.42 percent in Rajasthan (by Bhat).

Following vital roles which must be played by private sector to improve the health care system of Rajasthan:-

A. Private sector has also a role to improve the quality of health care in Rajasthan as public sector is not able to contribute significantly.

B. This sector has also to act as developer of academic, research and training institutions for health care in Rajasthan.

C. Private sector can also play a role for financing the health care system in Rajasthan

D. The status of health care in Rajasthan is poor and lags behind other states in India, especially those in the south of the country. In Rajasthan the infant mortality rate is 87 in compare to Indian average 79 per thousand. Percentage of safe deliveries is 66.80 only. So the private sector has to do combined efforts with public health care system to enhance the conditions of health care in Rajasthan.

Potential for private sector in Rajasthan

The health care sector in Rajasthan has been witnessing a huge demand-supply gap in its service delivery, as public health care services are found to be inadequate in serving the huge population. To bridge this gap and improve the efficiency of services, health care reforms, especially in the form of private partnerships in public sector are required. So here lies the potential for Private sector.

Here are some factors which shows the potential for high growth of private sector in health care in Rajasthan:-

A. Policy of Rajasthan Government for health care facilities

1. Land allotment on highly concessional rate for any hospital or medical institutions
a. Concession from 25% to 100% of reserve prices of land

2. Special deductions in Tax payble
a. Exemption from electricity duty on captive generation for a period of 7 years
b. 50%exemption in stamp duty
c. 50%exemption in conversion charge

3. Other facilities

B. Continuous demand of high-quality medical care from people of Rajasthan

a. In a survey done by "Poverty Action Lab" in Rajasthan, 81% report that their last visit to a private facility made them feel better. 75% of the people who need health care go to private hospitals.
b. Increasing health insurance premium and health claims
    a. The premium collected for health insurance rose more than 30% last year

C. Government of poorer states like Rajasthan (so called one part of BIMARU states) has limited resources to invest in health care services.

a. state has never committed more than 3.5% of its resources to this sector

D. Poor quality and accessibility to public health services

1. The quality of the public service is awful in Rajasthan. Low quality public facilities also seem to be correlated with worse health of citizens of Rajasthan.

2. Absenteeism in Public hospitals: - A recently completed survey of absenteeism in public health facilities in Rajasthan by Mr. Chaudhury shows a very high level of absence (43 per cent) of health care providers in public primary health care centres.

3. At most of the places the government clinics and hospitals are very far from the communities, private health care is not only  the privilege of the rich but often the only option of the poor as well.


In the era of globalization, healthcare became very important for a state like Rajasthan to make their citizen compatible. Public system for healthcare is not significantly contributed to fulfill the health care requirements of citizens of Rajasthan. So the contribution from private sector became very essential.

In a state where 30% people lives at BPL level, Government need to shake hand with NGO's or private sector to provide less expensive and quality health care facilities to the poorest of Rajasthan also.

Supporting government policy, high demand for quality health care facilities, failure of most of the public health care facilities to provide quality health care facility and a small chunk of resources provided by governments (Central and state both) are some of the factors which shows a high potential for private sector to establish.

(The limit were given (2 pages) was not adequate for me to complete the assignment but I have tried my best to give essential information only and that's why the hindrances and challenges for private sector is not included in the study. Bibliography is also not attached to it due to page limit)


Vinod Kumar Jain
Management Student
Aravali Institute of Management

Source: E-mail January 13, 2008




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