Sectoral Study

Health Care

-Pre-Independence there was high mortality rate and state of health care was very bad.
-Post liberalization, private players have come in and it has lead to increase in health care facilities. Further lot of Private-Public partnerships have come in.
Health Care Services now constitute 3% of GDP and see a big growth potential.
Health care includes the following :
1)Medical Service Providers:Physicians, Hospitals, Nursing Homes, Clinics
2)Pathology Labs and Diagnostic Centers
3)Pharmaceutical Companies
4)Medical Equipments Makers
5)Third Party Vendors (for Laundry,Catering)

Increasing Demand:
a)Since more and more Medical Tourists are visiting India now (more than 1lac/year) from Africa, West and MiddleEast, India has a demand which needs to be met.
b)Major challenges in healthcare in Inida are accessibility, quality and efficiency leaving a huge scope for improvement
c)Better health consciousness, life expectancy and quality of living has increased domestic demand.

Government Action:
a)Reduction in tariffs on medical equipments and drugs.
b)Lower interest in lending for pvt sector hospitals with 100+ beds.
c)Community Health Insurance for poor. Rs.30k cover is available for Rs.2 per day for people below poverty line.Govt pay Rs.100 per annum for them.
d)Constant RnD by govt and pharma companies.

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Retail Sector

-14% of the Indian GDP
-4% is organized and 96% is unorganized
-Highly Fragmented.Highest no. of retails outlets per capita in India.
-FDI is not allowed except for single brand retailing
-Rural Retailing through ITC's e-choupal and HUL's Project Shakti
-IT is used as a retailing tool.e.g. Amazon.com
-India's 1.1b population with 300m middle class attracts retailers

Advantages of FDI :
a)Wider choice to consumers .
b)Benefit to farmers through bulk sales to large retail outlets
c)Technological Upgradation such as cold chain,better supply chain,better customer relationship and other best practices. Access to International Quality Goods and Services
d) WalMart is 200b$ while our retail industry is worth just 300b$. So a huge scope of growth.

Disadvantages of FDI:
a)Companies like Walmart would sustain losses for multiple years to eliminate Indian retailers and to create monopoly. Retail is a major employer in India and millions would go job less if Wal Mart were to enter the retail segment.
India is labor intensive country while western countries are capital intensive.
b)China and Malaysia opened FDI in retail recently but were forced to enact new laws to control the rapid expansion of the new foreign malls and supermarkets.
c)Our manufacturing is 21% while Services is 60% and retail 14%.
So we should invest more in manufacturing so that the retail employment goes to manufacturing and and also to ensure that more Indian goods are sold by the retail sector. Only then can we afford FDIs.

Actions:
-Govt. should support the movement of unorganized retail to organized retail via easy financing.
-Also cold storage, hygiene and efficiency in supply chain should be introduced by the govt so that if FDI comes in future, we are competitive.

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Educational Sector

Advantages of FDI in Higher Education:
1)Mediocre Teaching Infrastructure will give way to Quality Teachers.
Imagine studying Quantum Physics from Stephen Hawking.
Currently in India, number of years of experience decide salary of a teacher rather than the quality of his work.

2) Schools like Harvard, Stanford may start their branches in India. World class schools and knowledge at India would slow down the brain drain.

3)Every year there is an outflow of US$4billion as Indian students go to abroad universities and pay the fee there.This can be saved via FDI.

4)Students from neighboring countries will then come to study in India, thus contributing to the education revenue in India.

5)Critics might say that this may lead to commercialization of education. But at least such universities would be better than hundreds of private universities run by politicians.Also, its perfectly possible for a university to be profitable as well as deliver high quality education at the same time. Afterall, all profit making firms deliver high quality products too.

6) Considering the current shortfall in supply of institutes of higher education as compared to the demand, its not possible for the government alone to deliver high quality institutes. In a knowledge economy, we need private players too.

Points to Take Care:
1) UGC may act as a regulator, but it will have to stop administering and controlling global colleges with Nobel Prize winning professors on their rolls. However UGC and AICTE will be useful in providing guidelines to colleges and disclose information about the colleges to the students, so that the students are not duped by some college.
2) Issues such as Reservation will be unacceptable to foreign schools who would not let their brand image be tarnished by sacrificing merit.
3)FDI in elementary and primary education may be an issue because the child will be exposed at an impressionable age to a curriculum which may not be inline with th social and cultural values of India.

Regulation In Education:
Regulation increases the cost of higher education.e.g. AICTE used to collect 50lac rupees per course and used to keep in a joint account for 10 yrs .Also the red tapism in the license raj of education regulations deters the genuine educationalists from setting up institutes.Hence these days most institiutes are started by politicians who can circumvent the license raj rules easily.