Although the private sector in health care is large and growing, it is poorly regulated with hardly any regard to quality of care. The World Bank paper on ‘Health Financing in India’ and the ‘World Development Report 1993’ advocated privatization and liberalization of the health sector. How relevant are these policy prescriptions for he Indian context? What exactly is the nature if the private health sector in India? What are the regulatory and monitoring in this sector? The private health sector is a large and important constituent in the country's health care delivery system. The share of the private health sector in India is sector is between 4 to 5 percent of the Gross Domestic Product. This share at today's prices works out to between Rs. 16,000 crore and Rs. 20,000 crore per year. India probably has the largest private health sector in the world (Duggal and Nandraj, 1991). This sector has enlarged greatly in the post independence period, especially in the 80s. A substantial financial burden of households is for meeting health care needs (1). This gains significant when we realise that nearly half of the country’s population does not have enough resources to meet its food requirements. Compared to state expenditure on health the private household expenditure is nearly four to five times more than that of the state (Duggal and Amin, 1989).

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