April 26, 2021


INDIA: Government tries to regain control of the pandemic

BY Aditi Phadnis

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As India prepares to vaccinate everyone above the age of 18 against Covid-19 from 1 May amid a serious challenge to its crumbling medical infrastructure, public anger, so far dormant, is growing at the government’s slow response, both federal and local.

Public health is under the charge of state governments. But even in federally-administered areas like the capital, New Delhi, the shortage of oxygen cylinders and ventilators is making people question the government’s claim that it is working round the clock to provide relief. Its credibility is in danger of being eroded as people are turned away from hospitals and die by the side of the road waiting for oxygen.

The central question is why the government did not see the second wave coming and plan for it. The judiciary has gone a step further and has criticized the government for abetting the pandemic by doing nothing to stop election rallies and religious congregations, thought to have contributed significantly to the growth of the infection.

Vaccine woes

After previously announcing that vaccine distribution would be centralized, last week, the federal government opened up the imports of all Covid-19 vaccines from anywhere in the world as long as it had been cleared by the drugs regulator in that country. It also allowed state governments to procure vaccines from any country and waived the 10% duty on imports. Of all vaccine imports, the federal government will keep 50% to distribute to low-income groups in government hospitals, and the rest will be free to be sold in the open market.

Through the second channel, state governments, private hospitals, and industries that have facilities to administer the vaccine will be able to procure doses directly from manufacturers. This means that state governments will now incur additional, unanticipated expenditure for the near-universal vaccination plan. Those sections of the population that the state government fails to access will fall through the cracks.

This is not the only problem. 600mn new recipients will become eligible on 1 May. Some 130mn shots have been administered in India so far, and over 111mn people are yet to receive their second dose. Depending on how many people in the priority groups are still left to receive their second shot by the time 1 May comes around, the country could need over 1.2bn doses of vaccines. Given current production capacity and the delay in bringing in foreign vaccines, supply will almost certainly fall short of demand.

More restrictions

To limit the spread of infection, state governments are resorting to harsh measures like lockdowns and night curfews to confine people to their homes, though these are not as stringent as the last round. Nevertheless, they are hurting the state’s economy and people’s livelihood, especially on small businesses. However, the government is firm about its resistance to any form of stimulus that might be seen as a subsidy, though support to low-income groups in the form of free food grain will continue for another three months. The economic impact of the second wave is still being assessed. Still, the Reserve Bank of India has unambiguously warned about the lurking dangers of inflation combined with the dip in growth. India’s biggest state-owned bank, the State Bank of India (SBI), revised its growth projection for 2021-22 downwards to 10.4% real GDP growth and 14.3% nominal GDP growth, from 11% and 15%.

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