"PPP is not public versus private!"

Sumanta Pal of SREI Sahaj diagnoses what ails PPP in e-gov

GN Bureau | February 13, 2010


Sumanta Pal, Sr. VP - Strategic Marketing, SREI Sahaj
Sumanta Pal, Sr. VP - Strategic Marketing, SREI Sahaj

Even as the PPP is in the stage of conceptualisation, the government seems to think that there is no private partner involved. The plans that are developed, thus, seem wonderful on paper but are not sustainable in the long run as business models.

The revenue-support model doesn't work in different local contexts. In some cases, Srei-SAHAJ had to literally support the government financially for the implementation of PPP projects we are a part of.

One of the other reasons where the PPP model for CSCs is deficient is that there has been no real financial inclusion across the country. Many of the VLEs we engaged do not have bank accounts. The lending and borrowing is still informal and a consequent debtors' problem arises.

A better way to go about PPP for the government would be to take the private sector into confidence to to ensure viable business-plans.

The government largely plays a monitoring role. What it needs to do is periodically engage with the private sector to evaluate the business models. An appreciation of the challenges both sectors face is required. Another impeding factor is having to deal with diffused structures of government.

Lot of private sector companies which qualify for many of the PPP project end up facing practical bottlenecks. Where we need the private sector to come in is much earlier – at the conceptualisation stage.

PPP needs to go beyond the monitoring from the government's end, and move to discussion on challenges. Otherwise, the entire process is just public versus private instead of being public-private-partnership.

The questions appreciating inadequacies and a far more aggressive dialogue between the government and the private sector need to be addressed.

A popular misconception with many village-level entrepreneurs (VLEs) I have met is that if their businesses don't run well, they don't have to pay back loans. The assumption that the CSC is government-mandated for them and is a right, frees them of their sense of obligation. It is understandable given how these things have an aspirational appeal in underdeveloped areas in rural India.

The complexity of these aspirational appeals and assertion of 'this-was-my-right' attitude is difficult to deal with, while surprisingly, the context out of which these notions arise are fairly simple and understandable. The need is to instil that missing sense of reciprocation.

A lot of educated, unemployed youth have turned VLEs - so have a lot of people who already had a job. This is nothing more than a secondary or tertiary income-source for them. This necessitates an urgent addressing of the question of financial inclusion.

We found an opportunity for participation for VLEs when they approached us saying that they didn't need what was on offer at the CSCs. Each area had unique needs that the CSCs could address. The mismatch between what CSCs offers and what the locals need keeps changing according to geographical contexts.

A mechanism needs to be developed where the VLEs identify priorities, the modalities of which the private sector works out. I think this where we need the government to step in to assess local needs. Given the huge scale, it is important to think through the model of partnership most suited.

(Pal is the Senior VP, Strategic Marketing, SREI Sahaj)

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