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The Andhra Pradesh government’s decision to operate 10 new government medical colleges under a public-private partnership (PPP) model – essentially handing them over to private managements – has been opposed by the opposition YSR Congress Party (YSRCP), as well as Left parties and activists.
On November 12, YSRCP organised a state-wide protest in the name of Praja Garjana (people’s roar), saying the PPP model will push public healthcare out of reach for the poor, and make medical education unaffordable for common students.
Retired IAS officer PV Ramesh, who served as Principal Secretary of the Department of Health and Family Welfare in united Andhra Pradesh, has been one of the most prominent critical voices against the move. In an interview with The News Minute, he spoke about the reasons for declining public healthcare systems, the role of consecutive administrations in Andhra Pradesh in pushing healthcare towards the private sector, and why he believes the PPP model is worse than privatising medical colleges.
The PPP model for Andhra’s medical colleges
In September 2025, the Chandrababu Naidu-led coalition government in Andhra Pradesh announced that at least 10 government medical colleges would adopt the PPP model.
These are not entirely new institutions. They are among the 17 government medical colleges announced earlier under the previous YSRCP government, when YS Jagan Mohan Reddy was Chief Minister.
The previous government sanctioned Rs 8,480 crore for these 17 medical colleges. Five were inaugurated in 2023 in Vizianagaram, Machilipatnam, Rajahmundry, Eluru, and Nandyal. The rest – in Pulivendula, Paderu, Piduguralla, Narsipatnam, Amalapuram, Palakollu, Bapatla, Markapuram, Madanapalli, Penukonda, Adoni, and Parvatipuram – were still under construction.
The TDP-led coalition government halted construction after coming to power, and announced the PPP model around 15 months later. Ten of the 17 medical colleges will now be developed on government land but run by private players.
The government claims it will “save” Rs 3,700 crore in development, and Rs 500 crore annually in operations and maintenance.
Outpatient services will be free, and 70% of in-patient beds will be covered under various public health insurance schemes, while 30% beds will be available under market rates.
Then why are critics opposed to the idea?
‘An ideological problem’
Speaking to TNM, PV Ramesh notes that healthcare remains more accessible within the public sector. “Anyone and everyone can walk in, and it inspires greater confidence in the public health system,” he says.
He points out that all 10 medical colleges proposed for the PPP model are located in small towns.
“Unlike other streams, in a medical college, learning and practicals go hand in hand. It's not just a college, it comes with a hospital. If you have 200 MBBS and PG seats, you also have over 600 hospital beds and several specialties, an ICU, a trauma care unit, emergency infrastructure, etc. It caters to lakhs of people.”
When these medical college hospitals are in the public sector, the faculty members or doctors come under the Directorate of Medical Education (DME). “The DME has a large pool of faculty who are all high-value professionals. They would be brought closer to the population around these tier 2 or tier 3 towns, so accessibility improves and the quality of care is also better,” he says.
Dismissing criticism, the government has argued that nothing will change under private management, and that healthcare will only become more efficient. CM Naidu has also claimed that under the PPP model, private parties will develop infrastructure faster and eventually return the projects to the government.
“By developing them under PPP, we are ensuring that the government does not face any financial loss, but will retain complete control and oversight of the colleges. The PPP model ensures efficiency and accountability,” Naidu has said.
But if the private sector would be more efficient, “why do we need a government?” asks PV Ramesh. “It’s an ideological problem. The government exists to provide essential public services for democracy to thrive – security, healthcare, education, livelihoods, housing, water. If the public healthcare system is not functioning, the problem is with the management within the government,” he says.
Ramesh, who has been in-charge of major public hospitals in the past, including Nizam’s Institute of Medical Sciences (NIMS) in Hyderabad (as Director) and NTR University of Health Sciences in Vijayawada (as acting Vice-Chancellor), blames bureaucrats and political leadership for the weak public healthcare system.
Under the PPP model, 70% in-patient services would be covered under government schemes for cashless treatment for the poor, such as NTR Vaidya Seva (formerly YSR Aarogyasri).
“Why transfer public money to a private entity, when the government itself can run the hospital?” he asks, questioning the quality of healthcare provided when hospitals are run for profit.
A report prepared by the consulting firm KPMG says that for a private entity to take over a government medical college, it must have recent experience of running a hospital with at least 420 beds and a medical college with 100 seats. It must also have a net worth of 30% of the total project cost, and annual turnover of 40% of the project cost for each of the last five years.
Ramesh sees the eligibility criteria as a way of handing over government medical colleges and hospitals to private entities already in the business, and who have close ties with the parties in power.
He argues that the current PPP model is even worse than total privatisation, as the contract would last nearly six decades. “The government is amortizing the public hospitals over decades, which is a more expensive transfer of public funds to private entities, while the returns to the government would be sub-optimal,” he says.
Ramesh also disagrees with the Naidu government’s argument that the state’s finances are too weak to bear the cost of setting up the 17 medical colleges. Health Minister and BJP leader Satya Kumar Yadav has argued that the Jagan government spent only around Rs 1,500 crore of the allocated Rs 8,480 crore, and that the plan can only be sustained under the PPP model.
But Ramesh points out that for a state with an annual budget of over Rs 3 lakh crore, spending around Rs 6,000 crore on public healthcare cannot be seen as an unviable burden. “Fund allocations could’ve been spread over five years. The amount required is a very small percentage of the state’s Budget,” says Ramesh, who also served as the Principal Finance Secretary to the Andhra Pradesh government under the previous Naidu administration.
Contrasting this with the huge subsidies offered to tech companies such as Google for a massive AI data centre in Vizag, he says, “Such projects don’t even generate jobs or major returns for the public or the state, but may serve to enhance the political leaders’ brand.”
‘Sale’ of medical seats began under Jagan government
Ramesh is also critical of the Jagan government, which set aside nearly half the seats in these new government medical colleges for ‘sale’, even before the PPP model entered the picture.
Usually, medical colleges run by the state government have to pool 15% of seats under the All India Quota (open to students from all over the country), with the remaining 85% seats reserved for local Andhra Pradesh students. Fees for these ‘convener quota’ seats are affordable, reservation policies apply, and they are filled based on NEET scores.
In 2023, YSRCP issued two government orders (107 and 108) which said that of the 85% seats set aside for local students, only half would fall under the ‘convener’ quota, with annual fees of Rs 15,000.
The rest would be “self-financed” seats with much higher fees – 35% under management quota (Rs 12 lakh annually), and 15% under the NRI quota (Rs 20 lakh). This seat division is usually followed by private colleges.
The 17 medical colleges were expected to add 2,550 MBBS seats. All of these seats should’ve been accessible at affordable fees. But with these GOs issued by YSRCP, over 1,000 MBBS seats became accessible only to those who can pay.
A similar model will continue under the NDA government with around 110 additional MBBS seats available to local students under the convener quota. Management quota seats would cost around Rs 10 lakh, and NRI quota seats Rs 57.5 lakh.
“This is a repudiation of merit and social justice, of the government’s responsibility,” Ramesh says, noting that candidates can now simply buy seats at even higher rates running into crores.
He adds that Andhra Pradesh needs not just more seats, but improved quality of medical education and graduates. As of 2022, around 1.06 lakh doctors were registered with the AP Medical Council.
He further argues that job quality for doctors and healthcare workers is also better under the public sector. “Without PPP, healthcare workers would get promoted, and there would be more recruitments under the DME,” he says, adding that the PPP model deprives healthcare workers of secure jobs and promotions.
Ramesh says privatisation of healthcare in Andhra Pradesh has happened systematically over the years under various governments, which have provided incentives, tax breaks, and subsidised lands for private hospitals and medical colleges, expecting them to cater to the poor as well.
“Funds were spent on Aarogyasri (public health insurance scheme). Instead of spending money on strengthening public healthcare systems, funds were transferred to private parties instead to provide services to the poor. Governments have weakened and broken the public healthcare system and are now trying to convince the public that privatisation is the only solution,” he says.