Abstract
This paper discusses and analyses the issues and policy options in taking initiatives to invite private capital through public-private partner ships with particular reference to the health sector. Shrinking budgetary support and fiscal problems make it difficult for the state gov ernments to increase their budgetary alloca tions to social sectors like health, education, etc. It is in this context that the paper argues that there is a need to evolve a proper policy which would address the question of publicprivate mix, scope of private-public partner ships, role of subsidies and incentives in promoting these partnerships and so on. The paper points out that there is a need to have explicit, transparent, and adequate mecha nisms which would ensure involvement of all stakeholders in the process.