Argue in favour of the need for different forms of government intervention in education and health sectors.
Education and health care services create both private and social benefits, which is why both private and public institutions exist in these markets. However, expenditures on these sectors make a substantial long-term impact and cannot be easily reversed. For instance, if a child is admitted to a school or health care centre lacking required services, substantial damage is done before the decision to shift them is taken. Hence, government intervention is essential.
Furthermore, individual consumers of these services do not have complete information about the quality of services and their costs. In this situation, the providers of education and health services acquire monopoly power and are involved in exploitation.
To counter this, the role of the government is to ensure that private providers adhere to the standards stipulated by the government and charge the correct price.
Additionally, when basic education and health care is considered a right of the citizens, it is essential that the government provides these services free of cost for the deserving citizens and those from the socially oppressed classes.
Finally, in a developing country like India, a large section of the population lives below the poverty line and cannot afford to access basic education and health care facilities. Therefore, different forms of government intervention are necessary to ensure equitable access.
Explanation
The answer highlights the key arguments from the textbook context: the dual private and social benefits of these sectors, the irreversible long-term impact of expenditures, information asymmetry leading to monopoly and exploitation, the need for regulatory intervention to maintain standards and prices, the provision of free services as a basic right for marginalized classes, and the inability of the poor to afford basic facilities.