Consider the following statements about the need for government intervention in education and health:
(A) Expenditures on education and health make substantial long-term impact and cannot be easily reversed.
(B) It is the providers, not the consumers, of these services who lack complete information about quality and costs.
(C) Providers of these services may acquire monopoly power and be involved in exploitation.
(D) The government’s role is to ensure that private providers adhere to the standards it stipulates and charge the correct price.
(E) The government should provide education and health services free of cost to all citizens, including the affluent.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A), (C) and (D) only
(A) Expenditures on education and health make substantial long-term impact and cannot be easily reversed. — Correct. This is why government intervention is essential.
(B) It is the providers, not the consumers, of these services who lack complete information about quality and costs. — Incorrect. It is the consumers who do not have complete information.
(C) Providers of these services may acquire monopoly power and be involved in exploitation. — Correct. Because consumers lack information, providers gain monopoly power.
(D) The government’s role is to ensure that private providers adhere to the standards it stipulates and charge the correct price. — Correct. The government checks standards and prices.
(E) The government should provide education and health services free of cost to all citizens, including the affluent. — Incorrect. Free services are for the deserving citizens and those from the socially oppressed classes.
NCERT (2026-27): “4.5 State of Human Capital Formation in India … We do understand that education and health care services create both private and social benefits and this is the reason for the existence of both private and public institutions in the education and health service markets. Expenditures on education and health make substantial long-term impact and they cannot be easily reversed; hence, government intervention is essential. For instance, once a child is admitted to a school or health care centre where the required services are not provided, before the decision is taken to shift the child to another institution, substantial amount of damage would have been done. Moreover, 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. The role of government in this situation is to ensure that the private providers of these services adhere to the standards stipulated by the government and charge the correct price. …” “… In a developing country like India, with a large section of the population living below the poverty line, many people cannot afford to access basic education and health care facilities. Moreover, a substantial section of India’s population cannot afford to reach super specialty health care and higher education. Furthermore, when basic education and health care is considered as a right of the citizens, then it is essential that the government should provide education and health services free of cost for the deserving citizens and those from the socially oppressed classes. …” |