Seminar

on

Public Private Partnership (PPP)

in Agriculture in India

Content

Meaning and Concept of PPP

Definition of PPP

Different Models of PPP

Need of PPP in Agriculture

Advantages of PPP

Challenges in PPP

Current Status of PPP

Suggestions for further improvement

of PPP

Submitted To

Dr. Rajshree Upadhyay

Professor, Deptt. Of HECM

College of Home Science, Udaipur

Submitted By

Shalini Pandey

M.Sc. Final, Deptt. Of HECM

College of Home Science, Udaipur

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Meaning and Concept

A public-private partnership is a contractual agreement between a public agency

(federal, state or local) and a private sector entity. Through this agreement, skills and

assets of each sector (public and private) are shared in delivering a service or a facility for

the use of the general public. In addition to the sharing of the resources, each party shares

risks and rewards potential in the delivery of the service and/or the facility. The term

public–private partnership describes a range of possible relationships among public and

private entities in the context of infrastructure and other services. The concept of PPP

presents a framework that ensures involvement of the private sector, while fine-tuning the

role of the government, so that different social obligations are met, successful sectorial

reforms introduced and targets for public investment are achieved. The most developed

and well-known form of PPP is one in which the private sector designs, builds, finances

and operates an amenity to provide services needed by the public agency.

An efficient PPP model ensures allocation of the tasks, obligations, and risks

among the public and private partners in an optimal manner. The public partners in a PPP

are government entities, including Ministries, departments, municipalities, or state-owned

enterprises. The private partners could be local or international and may include

businesses or investors with technical or financial expertise relevant to the project.

Increasingly, PPPs may also include non-government organizations (NGOs) and/or

community-based organizations (CBOs) who represent stakeholders directly affected by

the project. Effective PPPs recognize that each of the partners -the public and the private

sectors have their comparative advantages in performing specific tasks. The

government‘s contribution to a PPP may take the form of capital for investment

(available through tax revenue), a transfer of assets, or other commitments or in-kind

contributions that support the partnership. The government also provides social

responsibility, environmental awareness, local knowledge, and an ability to mobilize

political support. The private sector‘s role in the partnership is to make use of its

expertise in commerce, management, operations, and innovation to run the business

efficiently. The private partner may also contribute investment capital depending on the

form of contract. The structure of the partnership should be designed to allocate risks

amongst the partners based on their capabilities to manage those risks and thus, minimize

costs while improving performance.

In a PPP, each partner, usually through legally binding contract(s) or some other

mechanism, agrees to share responsibilities related to implementation and/or operation

and management of a project. This collaboration or partnership is built on the expertise of

each partner that meets clearly defined public needs through appropriate allocation of:

Resources

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Risks

Rewards

Responsibilities

Common elements of PPP includes:

a contract or an arrangement;

the provision of public infrastructure or services;

the transfer of risk from the public sector to the private sector;

a reward system based on performance or output; and

a focus on service delivery.

PPPs have three main aims:

1. PPPs seek to deliver better public services through increases in the quality and

quantity of investment. This will add to and complement existing government

funding. PPPs will be designed to provide better value for money.

2. PPPs will realise the full potential of public sector assets and nationally owned

enterprises so as to provide better value for the taxpayer.

3. PPPs will ensure that all stakeholders receive a fair share of the benefits of PPPs.”

Public and private sectors have different roles and strengths, and PPPs are a good way of

harnessing the best in both sectors. In this context, the most significant difference

between the sectors is that the private sector is subject to the discipline of the market and

this drives certain positive practices and behaviours. The relentless need to generate

profits and to compete in the marketplace forces the private sector to be more efficient

and innovative; to be more responsive to customer needs because of the need to compete

with other providers; and to develop business management and expertise which the public

sector does not have, or in which it does not specialize, such as project management and

the assessment of the commercial opportunities of new businesses. No matter what

measures the public sector takes, it can never fully replicate this competitive commercial

environment because it has to juggle multiple policy considerations. For instance, social

considerations may outweigh the purely economic ones. A desire to safeguard the money

also tends to promote a more risk-averse culture. PPPs are one way of bringing market

discipline and the benefits of private sector skills, knowledge and expertise to bear on

public services. Together with incentive structures, these features will result in savings

for the government in several ways. Value for money will come from lower lifecycle

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costs. Projects will have a greater likelihood of being completed on time and within

budget, and construction should be more durable and of a higher quality. PPPs will also

allow a better allocation of risk between the public and private sectors.

Definition of PPP

According to IMF (International Monitory Fund)

“Public-private partnerships refer to the private sector financing, designing,

building, maintaining and operating infrastructure assets traditionally provided by the

public sector.”

According to National PPP Policy, 2011

Public Private Partnership means an arrangement between a government or statutory

entity or government owned entity on one side and a private sector entity on the other, for

the provision of public assets and/or public services, through investments being made

and/or management being undertaken by the private sector entity, for a specified period

of time, where there is well defined allocation of risk between the private sector and the

public entity and the private entity receives performance linked payments that conform

(or are benchmarked) to specified and pre-determined performance standards, measurable

by the public entity or its representative.

The Planning Commission of India has defined the PPP in a generic term as “the PPP is

a mode of implementing government programmes/schemes in partnership with the

private sector. It provides an opportunity for private sector participation in financing,

designing, construction, operation and maintenance of public sector programme and

projects”.

Different Models of PPP

The models where ownership of the underlying asset remains with the public entity

during the contract period and project is transferred back to the public entity after the

termination contract are the preferred forms of Public Private Partnership models. The

final decision on the form of PPP is a determinant of the Value for Money analysis.

The PPP models can be classified into four broad categories in order of generally (but not

always) increased involvement and assumption of risks by the private sector. The four

broad categorizations of participation are:

Supply and management contracts

Turnkey projects

Lease

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Concessions

1. Management Contracts:

A management contract is a contractual arrangement for the management of a part or

whole of a public enterprise by the private sector. Management contracts allow private

sector skills to be brought into service design and delivery, operational control, labour

management and equipment procurement. However, the public sector retains the

ownership of facility and equipment. The private sector is provided specified

responsibilities concerning a service and is generally not asked to assume commercial

risk. The private contractor is paid a fee to manage and operate services. Normally,

payment of such fees is performance-based. Usually, the contract period is short,

typically two to five years. But longer period may be used for large and complex

operational facilities such as a port or airport.

There are several variants under the management contract including:

a. Supply or service contract

b. Maintenance management

c. Operational management

In the simplest type of contract, the private operator is paid a fixed fee for performing

managerial tasks. More complex contracts may offer greater incentives for efficiency

improvement by defining performance targets and the fee is based in part on their

fulfilment.

2. Turnkey

Turnkey is a traditional public sector procurement model for infrastructure facilities.

Generally, a private contractor is selected through a bidding process. The private

contractor designs and builds a facility for a fixed fee, rate or total cost, which is one of

the key criteria in selecting the winning bid. The contractor assumes risks involved in the

design and construction phases. The scale of investment by the private sector is generally

low and for a short-term. Typically, in this type of arrangement there is no strong

incentive for early completion of a project. This type of private sector participation is also

known as Design-Build.

3. Lease type of Arrangements

In this category of arrangement an operator (the leaseholder) is responsible for operating

and maintaining the infrastructure facility and services, but generally the operator is not

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required to make any large investment. However, often this model is applied in

combination with other models such as build-rehabilitate-operate-transfer. In such a case,

the contract period is generally much longer and the private sector is required to make a

significant level of investment.

Under a lease, the operator retains revenue collected from customers/users of the facility

and makes a specified lease fee payment to the contracting authority. In this types of

arrangements, the operator takes lease of both infrastructure and equipment from the

government for an agreed period of time. Generally, the government maintains the

responsibility for investment and thus bears investment risks. The operational risks are

transferred to the operator. However, as part of lease, some assets may be transferred on a

permanent basis for a period which extends over the economic life of assets. Fixed

facilities and land are leased out for a longer period than for mobile assets. Land to be

developed by the leaseholder is usually transferred for a period of 15-30 years.

4. Concessions

In this form of PPP, the Government defines and grants specific rights to an entity

(usually a private company) to build and operate a facility for a fixed period of time. The

Government may retain the ultimate ownership of the facility and/or right to supply the

services. In concessions, payments can take place both ways: concessionaire pays to

government for the concession rights and the government may also pay the

concessionaire, which it provides under the agreement to meet certain specific conditions.

Examples: BOT type of contracts

A model that entails a concession company providing the finance, design construction,

operation, and maintenance of a privatized infrastructure project for a fixed period, at the

end of which the project is transferred free to the host government. The granting of a

concession by the government to a private promoter, known as the concessionaire, who is

responsible for the financing, construction, operation, and maintenance of a facility over

the concession period before finally transferring the fully operational facility to the

government at no cost

These variations include the following:

• BOO = Build-Own-Operate

• BLT = Build-Lease-Transfer

• BOOM= Build-Own-Operate-Maintain

• BOOT = Build-Own-Operate-Transfer

• BOOTT = Build-Own-Operate-Train-Transfer

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• BTO = Build-Transfer-Operate

• DBFO = Design-Build-Finance-Operate

• DBO = Design-Build-Operate

• DBOM = Design-Build-Operate-Maintain

• DOB = Design-Operate-Transfer

• ROO = Rehabilitate-Own-Operate

• ROT = Rehabilitate-Operate-Transfer

Need of PPP in Agriculture in India

Over the past 60 years, Indian agriculture has recorded an average growth rate of

2.7% per year, making it the slowest growing sector. That we have not yet

succeeded in consistently touching 4% growth as targeted in the recent Five-Year

Plans indicates the challenges we face in agriculture. Thus agriculture is a key

sector for research, investment and development. There is an urgent need to work

together to bring innovations via partnerships between the private and public

sector, farmers and government to meet India's agriculture needs through new

technology and intervention models.

There is a need to introduce appropriate technologies and create suitable

institutions and infrastructure to promote a shift to high-value added crops. There

are emerging opportunities for traditional and high value crops that offer potential

to raise rural incomes. Such a shift will enable rainfed agriculture to increase

production, augment farm-income, generate employment, alleviate poverty and

conserve precious soil and water resources.

Over the past 60 years, Indian agriculture has recorded an average growth rate of

2.7% per year, making it the slowest growing sector. That we have not yet

succeeded in consistently touching 4% growth as targeted in the recent Five-Year

Plans indicates the challenges we face in agriculture. There is a scope to leverage

PPPs as a relevant vehicle in the agriculture sector. Enhanced yield and

productivity is a crucial need, with India still battling food insecurity and poverty.

Technology, better inputs and improved farming practices can make this possible.

Thus agriculture is a key sector for research, investment and development. There

is an urgent need to work together to bring innovations via partnerships between

the private and public sector, farmers and government to meet India's agriculture

needs through new technology and intervention models.

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With the rapid developments in agricultural technologies, the investments in

research and development are bound to increase, government have limited

investment in this area so public participation is needed.

In the present scenario, the challenge for the country is to make agriculture and

allied sectors more profitable, and to ensure that rural population has a larger

income to share. The emphasis should be on productivity, quality, diversification,

sustainability, promotion of innovations and exports. So the need for new

technologies with potential to provide holistic solutions, and the issues that relate

to their dissemination and commercialization. Which cannot be done by

government efforts only so the involvement of private organization also needed.

India is now one of the fastest growing emerging economies of the world, with a

targeted annual growth rate of over 8%. For the economy to grow at this pace,

there is a strong need to upgrade the country's infrastructure services. Public

Private Partnerships (PPPs) have been recognized as one of the most effective

mechanisms to do this.

For examples -

a. Developing a competitive value chain

b. Farm to Market Roads

c. Wholesale markets

d. Seed Industry

Advantages of PPP

1. One big advantage of Public-Private Partnership of the Technology is that

achievement can be taken to the farmer very rapidly. In case of development of

new seeds, the private partner can arrange seed production to reach the farmer, as

he is very keen to earn profit on his investment. If it is basic research then the

private firm can work with the results for application research.

2. With partnership between public and private sectors, the strengths of both the

sectors are leveraged. On the one hand, public sector has highly skilled and

efficient manpower in agriculture and on the other hand, private has excellent

managerial resources. Private extension would improve commercialization of

technology and make it available at the global level. The decentralized decision-

making in private sector helps in reducing time for commercialization. Proper

budget management and global regulatory expertise are certain other benefits of

the system.

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3. PPP modality provides option to modernize agriculture and revitalize rural

economies in terms of timely delivery of inputs, increased production, increased

income etc.

4. It is an effective means of conducting advanced research, developing new

technologies, and deploying new products for the benefit of small-scale, resource-

poor farmers and other marginalized social groups.

5. Incentivizing the private sector to deliver projects on time and within budgets by

the public organization, which leads to speedy, efficient and cost effective delivery

of projects. Hence PPP provides better Value at Lower cost with higher levels of

services

6. Efficiencies from integrating design and construction of public infrastructure with

financing, operation and maintenance/upgrading and Effective utilisation of state

assets to the benefit of all users of public services takes place.

7. Creation of added value through synergies between public authorities and private

sector companies, in particular, through the integration and cross transfer of public

and private sector skills, knowledge and expertise. Which leads innovation and

diversity in the provision of public services.

8. Alleviation of capacity constraints and bottlenecks in the economy through higher

productivity of labour and capital resources in the delivery of projects

9. Competition and greater construction capacity (including the participation of

overseas firms, especially in joint ventures and partnering arrangements)

10. Accountability for the provision and delivery of quality public services through an

performance incentive management/regulatory regime

11. Exploring PPPs as a way of introducing private sector technology and innovation

in providing better public services through improved operational efficiency.

12. Utilizing PPPs as a way of developing local private sector capabilities through

joint ownership with large international firms, as well as sub-contracting

opportunities for local firms in areas such as civil works, electrical works,

facilities management, security services, cleaning services, maintenance services,

etc.

13. Using PPPs as a way of gradually exposing state owned enterprises and

government to increasing level of private sector participation (especially foreign)

and structuring PPPs in a way so as to ensure transfer of skills leading to

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capacitated entities that can eventually export their competencies by bidding for

projects/ joint ventures

14. Creating diversification in the economy by making the country more competitive

in terms of providing agricultural services/inputs/technologies as well as giving a

boost to its business and industry associated with agricultural development (such

as construction, equipment, support services, etc.)

15. Supplementing limited public sector capacities to meet the growing demand for

agriculture development.

16. Extracting long-term value-for-money through appropriate risk transfer to the

private sector over the life of the project – from design/ construction to operations/

maintenance.

Challenges for PPP

1. There are misperceptions between public and private sectors with regard to

intentions, goals and credibility of achievements.

2. There is lack of accurate mapping of proprietary assets and responsibilities

between these sectors for effective functioning.

3. Lack of appreciation and follow-up of best practices followed by public and

private sectors with regard to business approach and skills; decision-making and

operational procedures; connectivity with largest constituency – farmers, traders

and consumers; technology generation, validation and delivery; interface with civil

society organizations; efficiency promoting work-culture; response style and time

and incentive.

4. The major factors coming up as hindrances for private investment in the sector are

low level of awareness about various Government schemes, low return on

investment, high degree of risk in the sector due to dependence on weather.

5. In village/hilly areas there is low population density and remote location, weather

dependence so the investment is risky for private organization as input cost is

greater.

6. There is a Gap between private sector ideology and government ideology because

private service providers are more concerned about commercial benefits while the

government perspective is broader development and poverty reduction.

7. Investors shy away due lack of legal and policy framework. A clear legal and

regulatory framework is crucial to achieving a sustainable solution.

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8. Development, bidding and ongoing costs in PPP projects are likely to be greater

than for traditional government procurement processes - the government should

therefore determine whether the greater costs involved are justified.

9. There is a cost attached to debt – While private sector can make it easier to get

finance, finance will only be available where the operating cash flows of the

project company are expected to provide a return on investment (i.e., the cost has

to be borne either by the customers or the government through subsidies, etc.)

10. Some projects may be more politically or socially challenging to introduce and

implement than others - particularly if there is an existing public sector workforce

that fears being transferred to the private sector, if significant tariff increases are

required to make the project viable, if there are significant land or resettlement

issues, etc.

11. There is no unlimited risk bearing – private firms (and their lenders) will be

cautious about accepting major risks beyond their control, such as exchange rate

risks/risk of existing assets. If they bear these risks then their price for the service

will reflect this. Private firms will also want to know that the rules of the game are

to be respected by government as regards undertakings to increase tariffs/fair

regulation, etc. Private sector will also expect a significant level of control over

operations if it is to accept significant risks

12. Private sector will do what it is paid to do and no more than that – therefore

incentives and performance requirements need to be clearly set out in the contract.

Focus should be on performance requirements that are out-put based and relatively

easy to monitor

13. Government responsibility continues – citizens will continue to hold government

accountable for quality of utility services. Government will also need to retain

sufficient expertise, whether the implementing agency and/ or via a regulatory

body, to be able to understand the PPP arrangements, to carry out its own

obligations under the PPP agreement and to monitor performance of the private

sector and enforce its obligations

14. The private sector is likely to have more expertise and after a short time have an

advantage in the data relating to the project. It is important to ensure that there are

clear and detailed reporting requirements imposed on the private operator to

reduce this potential imbalance

15. Given the long-term nature of these projects and the complexity associated, it is

difficult to identify all possible contingencies during project development and

events and issues may arise that were not anticipated in the documents or by the

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parties at the time of the contract. It is more likely than not that the parties will

need to renegotiate the contract to accommodate these contingencies. It is also

possible that some of the projects may fail or may be terminated prior to the

projected term of the project, for a number of reasons including changes in

government policy, failure by the private operator or the government to perform

their obligations or indeed due to external circumstances such as force majeure.

While some of these issues will be able to be addressed in the PPP agreement, it is

likely that some of them will need to be managed during the course of the project

Current Status of PPP in India

A. Brief statistics of PPP

The PPP model has been practiced in India for quite some time now. However, adoption

of the concept on a larger scale took place only post liberalisation, especially after 2006.

As the years have passed, the share of PPP in infrastructure investments have shot up,

aided by favourable policies and key reforms. According to the Department of Economic

Affairs (DEA), around 758 PPP projects with a total value of USD71.7 billion were

operative in India by mid-2011 across various sectors.

Furthermore, India Infrastructure Finance Company Limited (a non-banking financial

company) was established to provide financial support for projects with long gestation

period. In addition, to further simplify the compliance process, a Public Private

Partnership Committee (PPPAC) was formed. Since 2006 till date, PPPAC has granted

approval to 204 projects with a total project cost of USD37.5 billion. Likewise, various

funds such as Viability Gap Funding Scheme and Project Development Fund have been

introduced by the central and the state governments. Some of the state governments – for

instance, in Karnataka and Andhra Pradesh – have successfully built an institutional

framework to propel PPP investment, while others are following suit.

Though interaction of private sector and public sector is not new, yet the level is very

low. Certain areas of interactions at present are as follows.

B. Some examples of PPP projects in India

a. Project Golden Ray

PPP between the Government of Rajasthan and MIL which aims at improving

economic self-sufficiency of tribal maize farmers by enhancing maize yields and

incomes in five districts; Banswara, Dungarpur, Udaipur, Pratapgarh and Sirohi.

Provide high-yielding hybrid maize seeds, customized to the respective

geographies and agronomic conditions in each state

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Assist in the distribution process to beneficiaries identified by the

Government

Provide advice to farmers from sowing to harvest; guidance on post-harvest

care, soil testing and critical project management (where mandated)

Facilitate Knowledge Sharing Sessions for Department of Agriculture in

collaboration with the State Agriculture University

Enable user-industry linkages through maize productivity workshops and

procurement facilitation

b. e-Choupal, (run by ITC, a private sector entity) shows how mutual

cooperation between ITC, rural entrepreneurs, state agricultural universities

and the Indian government's extension machinery has served to bolster the

farmer's expertise and day-to-day awareness of what needs to be done to cope

with myriad agricultural needs.

c. Project Management Agency (PMA): Small Farmer’s Agri-business

Consortium (SFAC), an organization promoted by Ministry of Agriculture,

Govt. of India has appointed AFC as a Project Management Agency for

Publicity and Awareness Building Plan to support Venture Capital Assistance

Scheme (VCAS) during XII Five Year Plan(2012-2017).

Three packages comes under PMA are-

Advertisement Package

Public Relations Package

Awareness Building Events Package

d. To promote organic farming, AFC India Limited has been given the

opportunity to implement the organic farming project named as “Adoption

and Certification of Organic Management System with online Traceability

for Facilitation Domestic Retail Chains and Export in Gujarat, Chhattisgarh,

Orissa and Haryana”.

e. Maharashtra government has initiated a Private-Public Partnership (PPP)

for Integrated Agriculture Development (PPP-IAD) project under the

World Economic Forum’s (WEF) “New Agriculture Initiative”. The idea is to

create a value-chain in agriculture by involving corporates that will work with

farmers’ groups or associations from production to marketing stage. Twenty-

two companies, 12 of them private sugar mills, have been selected and have

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agreed to partner with such group in everything — from inputs and processing

to marketing. They will be working in seven categories of produces — sugar,

cotton, oilseed, pulses, fruits, vegetables and poultry.

PPP in Health

Public-Private Partnership or PPP in the context of the health sector is an instrument

for improving the health of the population. PPP is to be seen in the context of viewing the

whole medical sector as a national asset with health promotion as goal of all health

providers, private or public. The Private and Non-profit sectors are also very much

accountable to overall health systems and services of the country. Therefore, synergies

where all the stakeholders feel they are part of the system and do everything possible to

strengthen national policies and programmes needs to be emphasized with a proactive

role from the Government.

Some of the Major Health Projects in PPP mode includes:

a. Yeshasvini Health scheme in Karnataka

The Yeshasvini Co-operative Farmer’s Healthcare Scheme is a health insurance scheme

targeted to benefit the poor. It was initiated by Narayana Hrudayalaya, specialty heart

hospital in Bangalore, and by the Department of Co-operatives of the Government of

Karnataka. The Government provides a quarter (Rs. 2.50) of the monthly premium paid

by the members of the Cooperative Societies, which is Rs.10 per month. The incentive of

getting treatment in a private hospital with the Government paying half of the premium

attracts more members to the scheme. The cardholders could access free treatment in 160

hospitals located in all districts of the state for any medical procedure costing upto Rs. 2

lakhs.

b. Arogya Raksha Scheme in Andhra Pradesh

The Government of Andhra Pradesh has initiated the Arogya Raksha Scheme in

collaboration with the New India Assurance Company and with private clinics. It is an

insurance scheme fully funded by the government. It provides hospitalization benefits

and personal accident benefits to citizens below the poverty line who undergo

sterilization for family planning from government health institutions. The government

paid an insurance premium of Rs. 75 per family to the insurance company, with the

expected enrollment of 200,000 acceptors in a year.

c. Contracting in Sawai Man Singh Hospital, Jaipur

The SMS hospital has established a Life Line Fluid Drug Store to contract out low cost

high quality medicine and surgical items on a 24-hour basis inside the hospital. The

agency to operate the drug store is selected through bidding. The successful bidder is a

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proprietary agency, and the medical superintendent is the overall supervisor in charge of

monitoring the store and it’s functioning. The contractor appoints and manages the

remuneration of the staff from the sales receipts. The SMS hospital shares resources with

the drug store such as electricity; water; computers for daily operations; physical space;

stationery and medicines. The contractor provides all staff salaries; daily operations and

distribution of medicine; maintenance of records and monthly reports to SMS Hospital.

The SMS Hospital provides all medicines to the drugstore, and the contractor has no

power to purchase or sell medicines himself. The contractor gains substantial profits,

could expand his contacts and gain popularity through LLFS. However, the contractor

has to abide by all the rules and regulations asgiven in the contract document. The SMS

Hospital has also contracted out the installation, operation and maintenance of CT-scan

and MRI services to a private agency. The agency is paid a monthly rent by the hospital

and the agency has to render free services to 20% of the patients belonging to the poor

socio-economic categories.

d. The Uttaranchal Mobile Hospital and Research Center (UMHRC)

It is three-way partnership among the Technology Information, Forecasting and

Assessment Council (TIFAC), the Government of Uttaranchal and the Birla Institute of

Scientific Research (BISR). The motive behind the partnership was to provide health care

and diagnostic facilities to poor and rural people at their doorstep in the difficult hilly

terrains. TIFAC and the State Govt. shares the funds sanctioned to BISR on an equal

basis.

Beside this certain other PPP projects in field of Health are:

Emergency Ambulance Services scheme in Tamil Nadu

Urban Slum Health Care Project, Andhra Pradesh

Rajiv Gandhi Super-specialty Hospital, Raichur, Karnataka

Community Health Insurance scheme in Karnataka

PHC’s in Gumballi and Sugganahalli, Karnataka

PPP in Education in India

In the case of education, PPP has been proposed as an important strategy in the

Eleventh Five Year Plan. Among many things, the Eleventh Plan has proposed the setting

up of 6,000 new model schools in secondary education, affiliated to the Central Board of

Secondary Education. Of these, 2,500 are to be under the PPP model. The intention is to

set up these schools in the backward regions and remote areas where good schooling

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facilities do not exist, so that quality education is accessible in the backward regions as

well.

According to the model finalised by the Planning Commission in consultation with

the private sector, these schools will be set up by 2014 and will have the capacity to

educate 65 lakh students, of whom 25 lakh will be from the deprived sections. Each

school will have about 2,500 students, 1,000 of whom will be from deprived sections and

charged a token fee. Fifty per cent of the 1,000 students will be from the Scheduled

Castes, the Scheduled Tribes and the Other Backward Classes. They will be required to

pay a monthly fee of Rs.25 each. The rest of the children, who will be from other

deprived sections — non-income tax paying families — will be required to pay a fee of

Rs.50 a month. The remaining costs of these students, estimated to be Rs.1,000 to

Rs.1,200 a head per month, will be reimbursed by the Union government to the schools.

It is estimated that the government will have to pay Rs.10,500 crore until 2017. The

amount is likely to go up with escalating prices, in general, and increasing costs of

education, in particular.

Suggestion for improvement

1. There is a need to introduce a course on agricultural regulations at graduation level

so that student are familiarized with the complexities of managing agricultural

business.

2. There is a need for transparency and trust for mid-term review and for bilateral

agreement for developing new technologies. Clear laws for transfer of technology

and sabbatical provisions for scientists to work with industry need to be

established.

3. There is a need to create awareness among the stakeholders regarding various

Government Schemes. Moreover, to mitigate high risk in the sector, the

investment proposal/schemes should include sufficient incentives to attract private

entrepreneurs.

4. Collective action is needed for fulfill the needs of resource poor farmers and

food‐insecure consumers.

5. In order to increase this share, policymakers should look at setting up an

independent institutional structure for PPP handling, sector-specific regulatory

mechanisms and higher level of transparency of information for PPP. With the

best use of the various PPP models available and innovating through new ones, the

country is likely to confront challenges on the path of economic growth with ease.

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References

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