Deepak argues that in the era of privatisation, there is no need for government intervention in
education and health sectors. However, his friend Raju argues that education and health care x services create social benefits and therefore there is a need for government intervention in education and health sectors. Decide with reasons, who is right?
Raju is right, the government intervention in these sectors is essential due to following reasons
(i) Expenditures on education and health, make substantial long-term impact and they cannot be reversed.
(ii) Individual consumers of education and health services do not have complete information about the quality of services and their costs.
(iii) The government has to ensure that private institutions in these sectors adhere to the standards stipulated by the government and charge the correct price.
(iv) In developing economies, a substantial sector cannot afford to have these services by paying for it. These should be provided to them by the government.