VIJAYAWADA: The Centre has endorsed the State government’s adoption of the Public-Private Partnership (PPP) model in the medical and health sector, highlighting plentiful opportunities in the sector.
In a letter to Medical and Health Minister Satya Kumar Yadava, Union Health Mini-ster JP Nadda emphasized the need to formulate plans to implement PPP in the healthcare sector for the next three years, citing its success in expanding infrastructure in various sectors such as roads, airports, ports, energy, and urban infrastructure since 2000.
Nadda shared a five-page policy paper outlining the implementation of PPP in the healthcare sector, stating that assistance of 60 percent of the total project expenditure would be provided under the Viability Gap Funding (VGF) scheme for setting up medical colleges and creating other infrastructure.
For pilot projects, 80 percent of the project cost and 50 percent of the operational expenditure for the first five years would be provided as VGF.
PPP infra projects worth Rs 2,000 cr approved under VGF scheme: Nadda
The VGF assistance would be shared equally by the Centre and the State governments, with 30 to 40 percent Central assistance available for projects undertaken under the PPP model in the healthcare sector. Nadda explained that the PPP model offers wide-ranging benefits to the public sector through private sector participation, including expertise, innovation, and mobilization of funds.
The primary objective of PPP is to share responsibilities and risks, which would lead to expanded healthcare infrastructure, enhanced quality, and improved accessibility. Nadda highlighted seven benefits of the PPP approach, including significant expansion of healthcare infrastructure, efficient use of existing facilities, improved infrastructure and service quality, sustainable development of projects, improved accountability and transparency, and high-quality and faster services for patients.
Nadda noted that the use of PPP has already begun with the establishment of medical colleges, development of hospitals, diagnostic services, mobile medical services, and dialysis services, with projects worth Rs 2,000 crore approved under the VGF scheme. Currently, 919 dialysis centers are operating under the PPP model in 20 states.
Recalling the 2025-26 Union Budget, Nadda pointed out that the Finance Minister had proposed that states prepare PPP projects they intend to undertake over three years. To take advantage of the expanding PPP opportunities in the healthcare sector, Nadda advised the State Health Minister to establish a dedicated PPP Cell for project planning and coordination with the Centre.
State Minister Satya Kumar Yadav responded, thanking Nadda for his guidance and support, and elaborating on the efforts of the coalition government to develop 10 medical colleges under the PPP model in the state. Yadav sought Central assistance for the initiative, citing the Centre’s efforts to promote the PPP model.