AUGUST 25 EDITORIAL

1) LESSONS FROM PANDEMIC

Context:

The author talks about the need for a robust National Health Service-like health model for India.

Editorial Insights:

What’s the issue?

In the recent Monsoon Session, the health ministry has claimed that only Punjab has reported four suspected deaths during the 2^nd COVID-19 wave due to lack of oxygen.
- This contradicts every news report, televised SOS pleas of hospitals, overcrowded crematoriums & floating dead bodies on the Ganges.
Further, the LG of Delhi rejected the state govts proposal to commission committees to investigate oxygen deaths.
As per the volunteer-run Oxygen Shortage Deaths group, at least 629 oxygen-related deaths have happened since May 2021.

The Sorry State of Indian Healthcare System:

Even before the pandemic, every single year India has been witnessing similar horrific healthcare tragedies.
- In 2017, 800 children died in Jharkhand of suspected encephalitis.
- In 2015 due to power failure after floods, 18 patients died in Chennai hospitals.
- In 2014, due to illegal sterilization at an overcrowded govt health camp in Chhattisgarh, 13 women died.
For decades, Indian hospitals are beleaguered with absentee staff.
As per Niti Aayog, in Bihar during 2017-18, 60% of midwives, 50% of staff nurses, 34% of medical officers, & 60% of specialist doctors were vacant.
- At the same time, the employed staff were subjected to chronically overwork
Even after the pandemic, the Indian govt continues to budget less than 1% of GDP for healthcare which is the lowest among developing nations.
- In contrast China invests 3%, Britain 7% & the USA 17%.
- Due to the Indian govts inability to increase the health budget, the 62% of health expenses are paid by patients themselves.
  - Due to this, many families are falling into poverty.
If the govt had taken effective steps, the COVID-19 oxygen crisis could have been prevented.
- However, the central govt delayed by eight months a tender to build oxygen plants across 150 district hospitals.

Lessons from Britain’s National Health Service:

Every year Britain’s legendary health network cures 15 million patients with chronic ailments at a fraction of the cost spent by the US.
The NHS funded by direct taxes is also the 5^th largest employer in the world.
- One of every 20 British workers is employed as a doctor, nurse & technical personnel.
In a rapidly aging society, the NHS became as a closest thing to religion

Concluding Remarks:

Even in the 21^st century, the Indian public healthcare system is lagged behind in many parameters. It lacks basic medicines, equipment & oxygen & more importantly healthcare staff.
It is high time for India to build a robust & efficient healthcare model along the lines of Britain’s National Health Service.

Context:

Editorial Insights:

What’s the issue?

Recently Indian govt has unveiled a four-year National Monetization Pipeline (NMP) worth Rs 6 lakh crore to unlock value in brownfield projects by engaging the private sector.

NMP:

Govt unlock value in brownfield projects by:
- The engaging private sector,
- Transferring them revenue rights but not projects ownership,
- Utilizing the funds so generated for infrastructure creation across the country.
It has been announced to provide a clear framework for monetization & give potential investors a ready list of assets to generate investment interests.
The govt has stressed that these are brownfield assets that have been de-risked from execution risks & therefore should encourage private investment.

What is Monetization?

In this transaction, the govt is transferring revenue rights to private parties for a specified transaction period in return for upfront money, revenue share basis & commitment of investments in the assets.
- Real estate Investment trust(REITS) & Infrastructure investment trusts (InvITs) are the key structures being used to monetize assets in the roads & power sectors.
- These are also listed on stock exchanges providing investors liquidity through secondary markets as well.
- While these are structured financing vehicles, other monetization models on PPP such as Operation Maintain Transfer (OMT) & Toll Operate Transfer (TOT) have been used in highway sectors while Operations, Maintenance & Development (OMD) is being deployed in the case of airports.
Monetization will create further value for infrastructure creation in the country & explore innovative ways of private participation without transfer of govt ownership.
Since many complete assets are either languishing or no fully monetized or are under-utilized.
- So by bringing in private participation in this arena, govt will be able to monetize it better & ensure further investment in infrastructure building.

The Govt’s Plan:

Roads, railways & power sector assets will comprise over 66% of the total estimated value of the assets to be monetized.
In terms of annual phasing by value, 15% of assets with an indicative value of Rs 0.88 lakh crore are envisaged to be rolled out in the current financial year.
The NMP will run a co-terminus with the National Infrastructure pipeline of Rs 100 lakh crore.
The estimated amount to be raised through monetization is 14% of the proposed outlay for the Centre of Rs 43 lakh crore under NIP.

Challenges that affect NMP roadmap:

Lack of identifiable revenues streams in various assets,
Level of capacity utilization in gas and petroleum pipeline networks.
Dispute resolution mechanism.
Regulated tariffs in power sector assets.
Low interest among investors in national highways below four lanes.
The lack of independent sectoral regulators.
Structuring the monetization transactions providing a balance risk profile of assets & an effective execution of the NMP will be a key challenge.

Concluding Remarks:

Infrastructure has huge multiplier effects. The new NMP is a step in that direction of mobilizing private capital for the development of infrastructure.
NMP is aimed at creating a systematic and transparent mechanism for public authorities to monitor the initiative and for investors to plan their future activities. Therefore, the NMP will be a critical step towards making India’s Infrastructure truly world-class.