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By:

Rajendra Joshi

3 December 2024 at 3:50:26 am

Procurement first, infrastructure later

Procurement at multiples of market price; equipment before infrastructure; no accountability Kolhapur: Maharashtra’s Medical Education and Public Health Departments have been on an aggressive drive to expand public healthcare infrastructure. Daily announcements of new centres, advanced equipment and expanded services have reassured citizens long denied dependable public healthcare. Procurement of medical equipment, medicines and surgical supplies is reportedly being undertaken at rates two to...

Procurement first, infrastructure later

Procurement at multiples of market price; equipment before infrastructure; no accountability Kolhapur: Maharashtra’s Medical Education and Public Health Departments have been on an aggressive drive to expand public healthcare infrastructure. Daily announcements of new centres, advanced equipment and expanded services have reassured citizens long denied dependable public healthcare. Procurement of medical equipment, medicines and surgical supplies is reportedly being undertaken at rates two to ten times higher than prevailing market prices. Basic economics dictates that bulk government procurement ought to secure better rates than private buyers, not worse. During the Covid-19 pandemic, equipment and consumables were procured at five to ten times the market rate, with government audit reports formally flagging these irregularities. Yet accountability has remained elusive. The pattern is illustrated vividly in Kolhapur. The Dean of Rajarshi Shahu Government Medical College announced that a PET scan machine worth Rs 35 crore would soon be installed at Chhatrapati Pramilaraje (CPR) Government Hospital for cancer diagnosis. But a comparable machine is available in the market for around Rs 6.5 crore. A senior cancer surgeon at a major cancer hospital in western Maharashtra, where a similar machine was recently installed, remarked that the gap between what his hospital paid and what the government is reportedly paying was enough to make one ‘feel dizzy’. The label of a ‘turnkey project’ does not adequately explain a price differential of this magnitude. High Costs CPR Hospital recently had a state-of-the-art IVF centre approved at a sanctioned cost of Rs 7.20 crore. Senior fertility specialists across Maharashtra note that even a modern IVF centre with advanced reproductive technology equipment typically costs between Rs 2.5 crore and Rs 3 crore. The state’s outlay is reportedly approaching Rs 15 crore. Equipment arrived in June 2025 and lay idle for months owing to indecision about the site. Similarly, digital X-ray machines approved for CPR Hospital and a government hospital in Nanded; available in the market for roughly Rs 1.5 crore; were reportedly procured at Rs 9.98 crore per unit. Doctors in CPR’s radiology department, apprehensive about being drawn into potential inquiries, reportedly resisted accepting the equipment. One departmental head was transferred amid disagreements over signing off on the proposal. What’s Wrong These cases point to a deeper structural failure: Maharashtra has perfected what might be called the ‘equipment first, infrastructure later’ model. In any public hospital, the administrative sequence ought to be: identify space, create infrastructure, sanction specialist posts, and only then procure equipment. Compounding the procurement paradox is a parallel policy decision. On 20 December 2025, the state government decided to introduce radiology diagnostic services through a Public-Private Partnership model (PPP). Following this, an order issued on 6 February 2026 authorised private operators to provide PET scan, MRI and CT scan services at six government medical college hospitals: in Pune, Kolhapur, Miraj, Sangli, Mumbai and Baramati. CPR already has a 126-slice CT scan machine and a 3 Tesla MRI scanner, with another CT scan proposed. If the PPP arrangement proceeds, the hospital could simultaneously run one PET scan machine, two MRI scanners and three CT scan machines. Medical experts warn this could lead to unnecessary diagnostic testing simply to keep machines occupied, thus exposing patients to excess radiation while government-owned equipment gathers dust. A similar pattern was seen during the pandemic, when the Medical Education Department spent hundreds of crores on RT-PCR machines, only to award swab-testing contracts to a private company. Many of those machines remain unused today.

Deregulation, or the Hard Road to 2047

Updated: Feb 20, 2025

Growth at 8 percent for a decade is an ambitious target, and India will have to rethink regulation, industry and policy to get there.

Deregulation

The eve of the Union Budget presentation is typically overshadowed by the spectacle of fiscal numbers. That critical document - the Economic Survey - offers a more nuanced portrait of India’s economic trajectory. The ES typically provides an in-depth assessment of the country’s economic performance, outlines key structural challenges and proposes policy imperatives for the future.


This year’s Survey situates itself within the grand ambitions of the Vikisit Bharat Mission, which envisions India as a developed nation by 2047. But the gap between aspiration and reality is stark. The International Monetary Fund (IMF) defines a developed economy as one with a per capita income of $12,500. India currently lags at a mere $2,939. To bridge this divide, the Survey argues, India must sustain an annual growth rate of 8 percent for the next decade - an acceleration of at least 1.5 to 2 percentage points from its present trajectory. A formidable challenge, but not an impossible one.


Achieving this will require a fundamental transformation of India’s economic structure. The ES identifies key drivers for this transition: full literacy, high-quality education, a thriving industrial base and an aggressive embrace of emerging technologies such as artificial intelligence, robotics, and biotechnology. Employment generation is critical, with the creation of at least 7.85 million non-farm jobs annually to absorb its growing workforce. The services sector has performed well, but manufacturing remains an Achilles’ heel. Investments currently stand at 31 percent of GDP, well below the 35 percent threshold necessary to sustain higher growth. Moreover, a robust social infrastructure, particularly in healthcare, is crucial to sustaining human capital and productivity.


The Survey issues a stark warning about China’s growing dominance. China currently commands a staggering 28.8 percent of global manufacturing output, a figure projected to rise to 45 percent by 2030. In contrast, India’s share is a paltry 2.8 percent. The implications are profound: India struggles to produce critical goods at scale and remains heavily dependent on Chinese supply chains, particularly in renewable energy and electric vehicle components. This vulnerability exposes the economy to price fluctuations, supply disruptions and currency risks.


The solution lies in the ‘Make in India’ initiative. Strengthening domestic manufacturing and boosting exports are non-negotiable if India is to emerge as a serious contender on the world stage. However, industrial growth cannot flourish in a regulatory quagmire. The Survey underscores the need for bold deregulation to enhance ease of doing business. Excessive red tape stifles entrepreneurship, deters investment and inflates operational costs. The government has made progress, scrapping over 2,000 obsolete laws over the past decade, implementing the Goods and Services Tax (GST), and introducing the Insolvency and Bankruptcy Code. More recently, the Jan Vishwas Act of 2023 decriminalized 183 provisions across 182 central laws, easing the compliance burden on businesses.


The upcoming Jan Vishwas Bill 2.0 is set to decriminalize 100 more provisions across various laws. Additionally, a high-level committee will review regulatory bottlenecks in the non-financial sector, with an Investment Friendliness Index benchmarking state industry practice. If executed effectively, these measures could catalyse industrial expansion and foreign investment.


However, regulatory reform is not the sole preserve of the central government. State governments must align with the broader deregulation agenda, prioritizing economic growth over political posturing. The Survey emphasizes the butterfly effect of deregulation where incremental improvements in regulatory efficiency trigger a cascade of economic benefits, from increased entrepreneurship to heightened global competitiveness. States that recognize this dynamic will reap the rewards of higher investment and job creation.


That said, legal reform alone is insufficient. India must undergo a cultural shift in its perception of business. Decades of socialist rhetoric have ingrained deep-seated scepticism towards large enterprises, often painting them as instruments of exploitation. Business leaders are frequently vilified for political convenience, a mindset that stifles ambition and discourages risk-taking. If India is to become a global economic powerhouse, it must abandon these outdated prejudices and embrace a more business-friendly ethos.


The road to 2047 is long, and the 8 percent growth imperative is daunting. Success hinges on policy consistency, regulatory agility and an unwavering commitment to economic openness. India’s tryst with destiny is not guaranteed but with the right reforms, it is well within reach.

(The author is a Chartered Accountant and works at Authomotive Division of Mahindra and Mahindra Limited. Views personal.)

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