CONFLICT OF INTEREST BETWEEN PUBLIC AND PRIVATE SECTOR

CONFLICT OF INTEREST BETWEEN PUBLIC AND PRIVATE SECTOR

This Article is written by Adil Abbas intern under Legal Vidhiya.

ABSTRACT 

The relationship between the public and private sector in India is a crucial component of the country’s economic growth and development. However, this relationship can create potential conflicts of interest that can harm the public interest. Conflicts of interest can arise in various areas, such as infrastructure, healthcare, education, and other areas where the public and private sector intersect.

The conflicts of interest between public and private sectors in India are complex and multifaceted, requiring a nuanced understanding of the issues involved. This article will explore various conflicts of interest that exist between the public and private sectors in India and the measures that have been taken to address these conflicts of interest. By examining these issues, we can gain a better understanding of the challenges involved and identify potential solutions to promote transparency, accountability, and ethical behaviour in the public and private sectors.

INTRODUCTION

Conflicts of interest between public and private sector in India have been a subject of debate for many years. The government of India has been working to promote the growth of the private sector in the country, but there are concerns that this could lead to conflict of interest between public and private sectors. The public sector comprises government entities, public institutions, and other state-owned enterprises, while the private sector includes privately owned companies and businesses. Conflicts of interest arise when the interests of these two sectors are not aligned, leading to potential corruption, unethical behaviour, and other negative outcomes.

One of the key areas where conflicts of interest occur in India is in the awarding of government contracts to private companies. This is especially true in sectors such as infrastructure, where private companies often have more resources and expertise than the public sector. The lack of transparency in the awarding of these contracts has led to allegations of corruption and unethical practices, and there have been several high-profile cases of companies being awarded contracts without going through the proper bidding process.

 One of the main areas of conflict of interest is in the area of procurement. The government is responsible for procuring goods and services for various projects, but there are concerns that private companies could influence the procurement process to their advantage. This could lead to the government procuring goods and services at higher prices, or procuring goods and services that are not of the required quality. Another area of concern is in the awarding of contracts. There are concerns that private companies could use their influence to win contracts, even if they are not the best qualified for the job. This could lead to sub-standard work being done on government projects, which could ultimately harm the public. To address these concerns, the government of India has implemented several measures to promote transparency and accountability in the procurement process.

The government has also established a system of adults and reviews, which is designed to ensure that all procurement is done in accordance with the rules and regulations that govern the process. The government has also implemented measures to encourage the participation of small and medium-sized enterprises in the procurement process, which is designed to promote competition and prevent any one company from having too much influence over the process.

In India, the public sector is responsible for providing essential services to the people, such as healthcare, education, and infrastructure. The private sector, on the other hand, is responsible for creating jobs and generating economic growth. While the two sectors have different roles, they often overlap, leading to conflicts of interest. In this article, we will explore the conflicts of interests between the public and private sector in India, and the measures that have been taken to address them.

MEASURES TAKEN TO ADDRESS CONFLICTS BETWEEN THE SECTORS

India is a country that has been growing at an impressive rate for the past few decades. However, the two sectors often come into conflict, as their interests can diverge. This is particularly true in areas such as infrastructure, healthcare, and education, where the public sector has a responsibility to provide essential services, while the private sector has a responsibility to make a profit. The measures taken to address the conflicts of interest between the public and private sector are discussed below:

Infrastructure:

One area where conflicts of interest between the public and private sectors are particularly acute is infrastructure. Infrastructure projects are large, complex, and expensive, requiring significant investment from both the public and private sectors. The government is responsible for providing funding for infrastructure projects, while the private sector is responsible for designing and building them.

                                                         However, there are concerns that the private sector may be more interested in making profit than in delivering quality infrastructure. For example: a private company may cut corners or use sub-standard materials in order to reduce costs, leading to infrastructure that is less safe and less reliable. There are also concerns that the private sector may inflate prices or manipulate bidding process in order to win contracts, leading to infrastructure that is more expensive than it needs to be.

To promote transparency and accountability in the infrastructure sector, the government of India has implemented several measures. These measures include:

1. Public-Private Partnership (PPP) Model: The PPP model is a mechanism that allows the government to partner with the private sector to deliver infrastructure projects. Under this model, the government provides funding and regulatory oversight, while the private sector provides expertise and resources. This model ensures that the private sector is accountable to the government and the public for the quality of infrastructure that it delivers.
2. National Highways Authority of India (NHAI): The NHAI is a government agency responsible for the development, maintenance, and management of national highways in India. The NHAI uses a competitive bidding process to select private sector companies to design, build, and maintain national highways. The NHAI also monitors the quality of infrastructure delivered by private sector companies and takes action against those that do not meet the required standards.
3. Transparency and Accountability Measures: The government of India has implemented several measures to promote transparency and accountability in the infrastructure sector. These measures include publishing information about infrastructure projects online, establishing independent regulatory bodies to oversee infrastructure projects, and providing a mechanism for citizens to report corruption or malpractice.

Healthcare:

Another area where conflicts of interest between the public and private sectors are particularly acute is healthcare. The public sector is responsible for providing healthcare to the people of India, where the private sector is responsible for providing healthcare services to those who can afford them. 

                                            However, there are concerns that the privates sector maybe more interested in making a profit that in providing quality healthcare. For example: private hospitals may overcharge patients for services or prescribe unnecessary treatments in order to generate revenue. There are also concerns that private hospitals may discriminate against certain patients, such as those who are uninsured or cannot afford expensive treatments.

To promote transparency and accountability, in the healthcare sector, the government of India has implemented several measures. These measures include:

1. Regulation of Private Hospitals: The government has established regulatory bodies, such as the National Accreditation Board for Hospitals and Healthcare Providers (NABH) and the Quality Council of India (QCI), to monitor and regulate the quality of healthcare services provided by private hospitals. Private hospitals are required to obtain accreditation from these bodies in order to provide healthcare services.
2. Standardization of Healthcare Costs: The government has introduced measures to standardize healthcare costs in private hospitals. Under these measures, private hospitals are required to publish the costs of healthcare services on their websites and in their facilities. This ensures that patients are aware of the costs of healthcare services before they receive treatment.
3. Ayushman  Bharat Scheme: As discussed I the previous section, the Ayushman Bharat Scheme is a government –run health insurance scheme that provides coverage of up to INR 5lakh per family per year for secondary and tertiary care hospitalization. The scheme covers approximately 500 million people and has been successful in providing healthcare to those who cannot afford it.

Education:

A third area where conflicts of interests between the public and private sectors are particularly acute is education. The public sector is responsible for providing education to the people of India, while the private sector is responsible for providing education services to those who can afford them.

                                                      However, there are concerns that the private sector may be more interested in making a profit than in providing quality education. For example: private schools may charge exorbitant fees, which only a few can afford, or provide a lower quality of education compared to public schools. There are also concerns that private schools may discriminate against certain students, such as those from disadvantaged backgrounds.

To promote transparency of accountability in the education sector, the government of India has implemented several measures. These measures include:

1. Regulation of Private Schools: The government has established regulatory bodies, such as the National Accreditation Board for Education and Training (NABET) and the Quality Council of India (QCI), to monitor and regulate the quality of education provided by private schools. Private schools are required to obtain accreditation from these bodies in order to provide education services.
2. Right to Education Act: The Right to Education A ct is a government initiative that aims to provide free and compulsory education to all children between the ages of 6 to 14. Under this act, private schools are required to reserve 25% of their seats for children from economically weaker sections of the society.
3. Transparency and Accountability Measures: The government of India has implemented several measures to promote transparency and accountability in the education sector. These measures include publishing information about private schools online, establishing independent regulatory bodies to oversee private schools, and providing a mechanism for citizens to report corruption or malpractice.

CONCLUSION

The conflicts of interests between the public and private sectors in India are a significant issue that requires attention and action. The interdependence between the public and private sectors creates opportunities for collaboration and growth, but also creates potential for conflict of interest that can harm the public interest. The infrastructure, healthcare, and education sectors are particularly vulnerable to conflicts of interest due to the involvement of public funds and the delivery of essential services to the public.

To address these conflicts of interest, the government of India has implemented several measures such as the Public-Private Partnership (PPP) Model, the National Highways Authority of India (NHAI), the Ayushman Bharat Scheme, the Right to Education Act, and various regulatory bodies and transparency measures. However, there is still room for improvement in terms of strengthening regulations, increasing transparency and accountability, and promoting ethical behaviour in the public and private sectors.

It is crucial for the public and private sectors to work together towards a common goal of promoting public welfare and sustainable economic growth. This requires the development of a culture of trust, integrity, and transparency that values the public interest above individual interests. By addressing the conflicts of interest between the public and private sectors, India can create a more inclusive and equitable society that benefits all its citizens.

REFERENCES

1. “National Guidelines on Responsible Business Conduct.’’ Ministry of Corporate Affairs, Government of India, 2019, www.mca.gov.in/Ministry/pdf/NationalGuidelines_23032020.pdf
2. “Guidelines for Public-Private Partnership in Infrastructure.’’ Ministry of Finance, Government of India. 2019, www.pppinindia.gov.in/guidelines.html
3. Anurag Gupta and Ashish Kumar. “Conflicts of Interests in Healthcare: A study of Private Hospitals in India.’’ International Journal of Healthcare Management, vol. 12, no. 3, 2019, pp.175-183.
4. S. Mishra and S. Chaudhary (2022). Conflicts of interest in public-private partnership in India. Journal of Business Research, 132, 458-468.
5. A. Kumar and S. Deshmukh (2022).  Understanding the dynamics of conflicts of interests between public and private sectors in India. Asia Pacific Journal of Management, 38(2), 415-433.
6. S. Sharma and R. Singh (2022). A review of the literature on conflicts of interests between public and private sectors in India. Public Management Review, 24(2), 305-322.
7. Gautam Bhatia. “Public-Private Partnership in India: The Road Ahead.’’ The World Bank, 2019,  www.worldbank.org/en/news/opinion/2019/11/22/public-private-partnership-in-india-the -road-ahead.in
8. Chakrabarti, Souvik, et al. Corporate Governance in India: Change and Continuity. Routledge, 2017.
9.   Nair, A., and George, R. (2021). Conflicts of interests in public procurement in India: Causes and consequences. Journal of Public Procurement, 21(2). 147-170.
10. Banerjee, S., and Roy, A. (2022). Ethical considerations and conflicts of interest in public-private partnerships in India. Journal of Business Ethics, 183(1), 45-60.