The economic outlook for India in the last quarter of 2020 does not look promising, and armed forces remain on high alert for another clash on the Sino-Indian border. The government, in turn, is seeking to infuse optimism by talking up hopes that for a COVID-19 vaccine by late 2020 or early 2021. However, recall that Prime Minister Narendra Modi’s government had promised an indigenous vaccine as early as mid-August, a claim the government and its apex medical research body has since walked back.
India’s central bank, the Reserve Bank of India (RBI) was the only central bank in the world to shy away from predicting in its annual report (2019-20) end of August, how much growth might have contracted in FY2019-20, opting instead to predict a range of possibilities: from a V-shaped rebound led by a spurt in demand, to stagnation, postponed spending decisions and behavioral and demographic changes.
Adding to the gloom are worries that with tensions high on the border with China, a small accident could cause a short, sharp spell of armed conflict if military and political level talks do not lead to disengagement. Hopes are pinned on a possible meeting between Prime Minister Narendra Modi and President Xi Jinping when the two leaders meet in November for a G20 summit.
But lightening the mood somewhat is an announcement by the health minister earlier this week that a vaccine to prevent COVID19 might be available soon.
According to the government, a joint initiative led by Russia’s state-owned health facility and a private Indian pharmaceutical company has made substantial progress. While Russia has extensive pharmaceutical research bodies, it has only a few manufacturing companies. This gap is met by Indian companies. The Sputnik5 vaccine, unveiled on 5 August, is currently undergoing Phase III trials in Russia and is expected to undergo clinical trials in India, leveraging the large number of infections and technically trained manpower to conduct the trials. While other vaccines, like the one being developed by UK and an Indian company, are also in the pipeline, the Indian government believes the Sputnik might be the first one to hit the markets.
On the assumption that the vaccine will be available sooner than later, questions are already being raised about whom it will be administered to first, whether India has a cold chain system in place that is robust enough to store the drug and most importantly, how pricing will be decided. Even after an effective vaccine is available, rolling it out safely across India’s 1.3 billion people will constitute a formidable challenge in the fight against its surging epidemic.
India is one of the few countries in the world which is partnering every effort anywhere in the globe to find a vaccine. The only exception is the Chinese company Sinovac which has opted to use Bangladesh as its partner in the region and is moving fast towards a COVID vaccine after clinical trials.
If things go according to plan and a vaccine is declared fit for use by the spring of 2021, the Modi government is already readying plans to take credit for it. His party, the Bharatiya Janata Party (BJP) reckons public mood is supportive of Modi and absolves him of blame in managing the pandemic. The next election where this will be tested will be for the state of Bihar, scheduled for October-November that the BJP, which is in power in the state currently, in coalition with a partner, will win easily. The BJP belief is that economic hardship will be forgotten once a vaccine is available and by the time the next round of state-level elections come around (five states are due to go to the polls in April 2021), the party will be well-positioned to dominate again. But central to all these plans is the discovery of a vaccine that works. If this does not materialize, the BJP’s poll plank is to showcase how “efficiently” it has managed the pandemic.