The public-private partnership (PPP) model could prove to be an important cog in the government's machinery to bring about inclusive growth-UPA government's much-cherished dream for the 11th five-year plan period.

Initial indications suggest that the government is inclined to rope in the private sector for management of teaching staff and payment of salaries. Construction and maintenance of the premises, on the other hand, could be in the government's domain.

In the UK, the PPP model for education entails private sector funding in the construction and maintenance of school premises while the management of teaching staff and payment of salaries remains in the government domain. Among issues that need to be addressed the important ones are setting out detailed performance standards and establishing an independent regulatory mechanism for ensuring that these standards are met.

Finance ministry has indicated that the private sector could be assured a 15 per cent return on investment and this can be built in while computing the gap arising out of excess costs over revenues. Along with innovative financing models for the infrastructure sector, the government is turning its attention to the area of infrastructure facilitation services.

However, there are certain issues that need to be examined relate to the conception of PPPs. Instead of attracting private money for public sector projects, as the Planning Commission claims, it may end up promoting private profit-making with public money. The justification for bringing in multinationals in the name of augmenting infrastructure was accompanied by guaranteed rates of return in foreign exchange and tax concessions. All this was sold as being in the national interest.

Invariably, such projects entail the jacking up of user charges, which effectively prevent the poor from using these infrastructure facilities. Already, the poor are being prevented from using facilities such as roads, since they cannot afford toll taxes. Further, it is not as if separate investment would be undertaken to provide the poor with alternative facilities. Once PPP becomes the norm, all social amenities, such as water supply, electricity, etc., would come with user charges. This has happened in a telling manner in Latin American countries. India will be headed in that direction if this trajectory is followed. In such a scenario UPA's, aam admi projected development plans will only remain true on paper.

Though the Planning Commission talks in terms of a PPP plan being drawn up in addition to the state's annual plan, this, in itself, will undermine the composite planning process. This is because these plans will be competing for funds and if a growing number of projects get routed through the PPP, less will be left for the non-PPP annual plan.

However, the PPP model would help the government to concentrate on non-bankable projects, which are in the genuine interests of the poor. Scarce resources can thus be utilised for socially worthwhile projects.

Under such services, a private company taking up construction of a PPP project may enter into a back-to-back agreement with another company for undertaking maintenance of the facility over the period of the contract. To make it lucrative enough for the private sector to take up facilitation, the government needs to clean up the regulatory policy. Less of red tape will ensure that the private sector takes part in the development process.