The sharp spurt in numbers of Covid-19 positive cases, fatalities, sudden shortage of vaccines, hospital beds and associated equipment threatens to reverse the limping recovery of the Indian economy from a year ago when a total lockdown was imposed by the Central government.
Although politicians tend to blame the people, the second wave of the pandemic has gained momentum not so much because of reluctance of the general populace to wear masks and maintain hygiene and social distancing, as by mass political rallies — legislative assembly elections have recently concluded in five states — and religious festivals including the Kumbh Mela which attracted 9 million people to the holy city of Haridwar in April.
Less than six months ago the Indian economy began the process of recovery from the world’s most stringent industry and business lockdown hurriedly decreed by the Centre on March 25, 2020. The future looked bright because the country accidently hosts the Pune-based Serum Institute of India (SII) — which is not as the name suggests a public sector company, but an entirely privately promoted business enterprise. In June 2020, SII signed a contract with the UK-based pharma company AstraZeneca to manufacture one billion doses of Covishield, an anti-Coronavirus vaccine developed in record time by AstraZeneca in collaboration with Oxford University.
Typically, instead of signing a mega-bucks contract with SII and paying the customary advance, the BJP/ NDA government signed its first contract with SII for 110 million vaccine doses at a concessional price as late as end April. On the other hand, the US signed with AstraZeneca for 300 million doses in April 2020 and 100 million doses with Pfizer last July.
Similarly, Britain signed a contract for 90 million doses with AstraZeneca in April 2020. The outcome of India’s foolish penny-pinching is that SII didn’t have the capital required to ramp up production, and was reduced to begging the government for a loan of a “few thousand crores”. Belatedly in April this year, the Centre sanctioned urgent suppliers credit of Rs.3,000 crore for SII and Rs.1,500 crore for Bharat Biotech (another private vaccines manufacturing company) to urgently augment production capacity. Simultaneously, distribution of vaccines has been decentralised to state governments and private hospitals to enable all citizens over 18 years of age to be vaccinated. However, because it was compelled to give priority to Union government needs, SII has damaged its relationship with AstraZeneca by not meeting its contracted supply obligations.
Such delay because of petty bargaining, bullying private enterprises while reposing over-confidence in the capabilities of the neta-babu brotherhood and government monopolies combined with contempt for contracts has ruined the Indian economy. Regrettably, the so-called educated middle class is complicit. The world over governments have promptly paid market prices for vaccines so that corporates with capability and reputation can ramp up production as fast as possible. It’s India’s tragedy that foolish, time agnostic neta-babus persist with negotiating while the citizenry is being decimated by the Coronavirus pandemic