On May 21, the central board of directors of the Reserve Bank of India (RBI) approved the transfer of Rs 99,122 crore as surplus to the central government for the accounting period of nine months ending March 31, 2021 (July 2020-March 2021).
This transfer to the government has raised a few issues. Let’s look at them point wise. But before we do that, I want to make a disclaimer here. This is a complicated topic and to make sure that I am able to explain it in simple English, I have left out a few details. At the cost of repetition, the idea is to explain the issues at hand, than get all the details right. So, to everyone who understands this inside out, apologies in advance.
Here we go.
1)The RBI’s accounting year was from July to June, different from the April to March period that the central government follows. From 2021-22 onwards, the accounting year of the RBI will be the same as that of the government. Given this, the last accounting year of the RBI was for the period of nine months from July 2020 to March 2021, as it moved to the government’s accounting year.
Despite this shortening in the accounting year, the RBI surplus to the government has jumped big time. The surplus transferred to the government from July 2019 to June 2020, had stood at Rs 57,128 crore, for a period of full 12 months. Clearly, there has been a huge jump in the surplus transferred to the government, once we consider the fact that the last accounting year of the RBI was just nine months long.
2) The annual budget of the central government presented by the finance minister Nirmala Sitharaman on February 1, had assumed that the central government would earn Rs 53,511 crore as way of dividend/surplus from the RBI, the nationalised banks and the financial institutions (read the Life Insurance Corporation of India). A few months later, the surplus transferred just by RBI is much more than Rs 53,511 crore. So what gives?
3) Let’s first try and understand how the RBI managed to generate such a huge surplus, which was unexpected (or at least not made public) up until the budget was presented earlier this year. From July 2020 to March 2021, the RBI gross sold a total of $85.2 billion of its foreign exchange.
An accounting change made in 2019, thanks to the Bimal Jalan Committee report, now allows the RBI to pass a part of the profit made from selling foreign exchange, to the government as a surplus. The earlier system was different (for the sake of simplicity we won’t go there).
There is a certain weighted average price at which RBI has bought these dollars over the years. The RBI doesn’t reveal this detail. As per Ananth Narayan, Senior India Analyst at the Observatory Group, this weighted average stood at Rs 55.70, from July 2019 to June 2020.
It would be fair to say the weighted average would be a little higher in the last accounting year, more towards Rs 58-60 to a dollar. The RBI would have sold these dollars, from July 2020 to March 2021, at Rs 72-75 to a dollar, and thus made a profit of around Rs 15 for every dollar sold.
A part of this profit has been passed on to the central government as a surplus. So far so good.
4)While at the aggregate level, everything looks fine, if we start to look at the detailed data, this doesn’t pass the basic smell test. Take a look at the following graph, which basically plots the total gross dollars sold by the RBI every month from July 2020 to March 2021.
Source: Centre for Monitoring Indian Economy.
The above chart makes for a very interesting reading. Close to 60% of the dollars sold during the accounting year were sold in the last two months ($50.5 billion of the total $85.2 billion). More than 77% of the dollars sold during the year were sold in the last three months ($65.9 billion of the total $85.2 billion).
What does this tell us? It tells us that the RBI sold a lot of dollars after the finance minister had presented the budget. And a good chunk of the surplus given to the government was probably thus generated. If I was a gossip columnist, I would have definitely speculated, whether one of the secretaries in the FinMin dialled RBI for more money, around the time the budget was presented.
5)As mentioned earlier, the facts stated above don’t pass the basic smell test. The RBI at various points of time needs to sell dollars in order to manage the dollar rupee exchange rate. While the RBI sold $65.9 billion from January to March, it also bought $61.8 billion during the same period. On the whole, this wouldn’t have made much of a difference in moving the foreign exchange market in a particular direction, when it comes to dollar rupee exchange rate.
Take a look at the following chart, which plots the dollar rupee exchange rate from January 2021 to March 2021.
Source: Yahoo Finance.
As can be seen from the above chart, the dollar rupee exchange rate moved within a narrow range of Rs 72.4-73.6, for the first three months of 2021.
So what does this really mean? The RBI sold lots of dollars after the finance minister’s budget speech, not because that was what was required in the foreign exchange market, but in order to generate an accounting surplus for a cash-starved government. If I were to put it in very simple terms, the RBI led by Shaktikanta Das, resorted to jugaad.
6) The way things stand the RBI is not allowed to directly finance the expenditure by printing money and handing it over to the government to spend. Hence, over the last couple of years, it has been resorting to different ways to do so. Selling and buying dollars in order to generate an accounting profit is one such way.
If I were to be slightly flippant here I would ask a rhetorical question – Is RBI a central bank or is it a government sponsored hedge fund?
Another way of financing the government has been printing money and buying existing government bonds from banks and other financial institutions.
While this move does not hand over money to the government directly, it does ensure that the supply of money in the financial system goes up, and the newly created money can be used by banks and financial institutions to buy fresh government bonds. Hence, this is indirect monetisaton of the government’s fiscal deficit or the difference between what it earns and what it spends.
To conclude, while nothing can stop a central bank from printing money, the tactic of selling dollars in order to generate a profit depends on how much the rupee depreciates against the dollar. While the weighted average cost of the dollars that the RBI currently has, is less than Rs 60 to a dollar, it will only rise in the years to come.
Hence, for enough profit to be generated through this route, the rupee needs to depreciate against the dollar. But that’s where atma nirbharta will come in and limit the RBI’s hand. Strong nations have strong currencies, at least that’s the idea in the heads of the politicians who run the current government.
India began administering covid vaccines on 16 January 2021. Within a week, the Indian government had sent almost 50 lakh free doses to Bangladesh, Bhutan, Nepal, Myanmar and other countries. The Modi government calculated that it could raise India’s global stature by pursuing a covid vaccine diplomacy strategy – dubbed vaccine maitry.
By the end of March, India had exported more vaccines than administered to its own population. In fact, India’s ambassador to the United Nations (UN) wore this fact as a badge of honour. In an UN general assembly meeting on March 26, Ambassador Nagaraj Naidu claimed: “In fact, as of today we have supplied more vaccines globally than have vaccinated our own people.” (The statement clearly hasn’t aged well).
Of course, as we know, India was hit by a massive second wave of covid in early April, which has caused widespread loss of life, health and wealth.
As India continues to grapple with the devastation, the government’s export strategy has come under scrutiny. Even the Serum Institute of India (SII), manufacturer of the Covishield vaccine, has been criticised for vaccine exports. Taking note of this criticism, SII came out with a statement defending the vaccine roll-out in India, including the rationale behind exporting vaccines before the second wave set in.
Let’s look at the underlying data to examine the publicdiscourse on this issue, including some of Poonawalla’s claims.
The above table presents the data for the total covid vaccines exported – both by month, and by category. Vaccines sent abroad are divided into three categories: a) grants made by the Indian government, b) purchases made by the foreign governments (under commercial), and c) SII vaccines sent to COVAX – the international consortium that is coordinating the distribution of covid vaccines to low-income countries.
Central to the vaccine export debate, is this simple question: Did the government’s vaccine diplomacy effort contribute to India’s vaccine supply crisis?
The data presented in the above table provides some clues. Let’s look at them point wise.
1)A total of 1.07 crore vaccines were sent as donations to other countries. Of this, most of the vaccines were sent before April, when the second wave started. This category comes with nuance attached to it. The government of India purchased the covid vaccines from vaccine makers (almost exclusively from SII) and decided to send over 1 crore doses to other countries instead of making them available to Indian citizens.
Helping other countries who are also in need is a noble idea and can earn valuable diplomatic capital and goodwill. But it also comes at a cost. Clearly, the government thought that the benefits accrued by this act of benevolence outweighed the potential cost.
Making judgment calls on future events is an intrinsic part of leadership. Deciding to donate over one crore vaccines while most of the country was still not vaccinated was one such judgment call made by PM Narendra Modi and his government. The obvious alternate use of the vaccines that were given away to other countries – or what economists call ‘opportunity cost’ – was to inoculate Indian citizens.
Of course, one can always argue that one crore doses wouldn’t have made much of a difference in the overall scheme of things, given that India needs to vaccinate a total of 94.3 crore adults (people aged 18 and above).
Nevertheless, the opportunity cost of the one crore vaccines was the increased immunity of many Indian citizens. Or as the old cliché goes, something is better than nothing.
Given both the severity of the infections and the lack of supply that has slowed down the vaccination drive since early May, there can be no doubt that the decision to give away vaccines wasn’t a great judgment call.
While one can argue (like Poonawalla does) that the intensity of the second wave of covid blindsided many, any government’s primary responsibility is to keep its citizens safe. If it fails to prepare for an event that leads to mass death and destruction, it has failed in discharging its primary duty.
As we had explained in a previous piece, the Indian government was caught napping, while other countries were stocking up on vaccine doses through the second half of 2020 and early 2021. (You can see the table here). The government got caught believing its own rhetoric. Using the surprise element of covid as an excuse would have worked at the point when the first wave struck. It doesn’t really hold when talking about the second wave.
In many ways, the covid pandemic is a war-type scenario. Donating life-saving vaccines when our own population is still vulnerable is comparable to giving away body armour that could protect soldiers on a battlefield. That the enemy struck with more ferocity than expected, is not an acceptable excuse.
2)Nevertheless, there is much more to this story. A total of 3.58 crore doses were exported from January to March as part of purchase agreements between vaccine makers and foreign governments. The Serum Institute of India (SII) was the main player here, with Bharat Biotech (BB) having exported only 3.25 lakh doses abroad.
3)Another 1.99 crore doses were sent to the COVAX consortium by SII. COVAX is the global effort to procure vaccines for low-income countries led by Gavi, the Vaccine Alliance, Coalition for Epidemic Preparedness Innovations (CEPI) and the World Health Organization (WHO). Over 1.70 crore of these doses were sent in March alone. SII has contractual obligations to deliver vaccines to COVAX as part of its licensing agreement with Astra Zeneca and collaboration with Gavi.
Given that over 5.5 crore doses (3.58 crore plus 1.99 crore) sent abroad were a part of private contracts and licensing agreements between SII and foreign entities, can the Modi government really be held responsible for allowing the export of these vaccines? Supporters of the government will say no, while detractors will say yes. We, on the other hand, can only offer some nuance.
1)It is incorrect to group the vaccines which the government gave out as grants in the same category as the vaccines that were sent as part of commercial/COVAX agreements. The government is directly responsible for the former being sent abroad, and only tangentially responsible for the latter. Across all categories, vaccine manufactures (SII or BB) should not be targeted for exporting vaccines.
They were either selling to the Indian government, who then decided to share its stocks with the world, or fulfilling their contractual obligations – both perfectly reasonable and legitimate actions.
That said, in February and March, when the Covid situation seemed under control in India, the Modi government was happy to claim credit for all exported vaccines, including the ones being sent as part of private contracts. Hence, by their own logic, the administration should be held accountable for all 6.6 crore vaccines exported. But their logic was flawed when they claimed credit, and it would be flawed to pin equal responsibility to all export categories.
2)The 3.58 crore vaccines that foreign entities could buy from SII and BB was only made possible because the Indian government had not been proactive in placing vaccine orders. The government could have placed much larger advance orders, like other countries did. It could have done so especially with SII, to ensure that it got the lion’s share of the company’s production capacity, outside of its obligations to COVAX.
The government gave the first order for vaccines in January 2021 when it procured one crore shots from SII and 55 lakh shots from BB. After this initial order, the government has been ordering vaccines in a piece-meal manner.
An order of 12 crore doses (10 crore from SII and 2 crore from BB) was placed in March. The exact dates for other intermediate orders is not in the public domain, but around 16.5 crores doses were ordered before April 28. In early May, the government issued a statement clarifying that a new order of 16 crore doses (11 crore from SII and 5 crore from BB) was placed on April 28. The timing and quantity of these orders meant that vaccine makers were not given the fillip to prioritise maximum production with an assurance that their supplies will be purchased by the Indian government.
Prioritising your own citizens in a time of crisis is not selfish. In fact, it is the right thing for an elected government to do. The United States (US) which has the most robust vaccination drive in the world has been doing that, and justifiably so. The US chose not to export any of its vaccines, including ones that were not even authorised for domestic use till its vaccine supply exceeded local demand.
3)Lastly, it is not entirely correct to claim that the government is in no position to interfere with vaccine manufacturers’ contract commitments to foreign countries or agencies. India has placed a restriction on vaccine exports since late March – so the provision exists to take such an action. Of course, placing such a restriction before the second wave hit, would have been difficult to justify.
These export restrictions bring up an interesting dilemma of vaccine exports vis a vis the role that the government has in the execution of private contracts. As mentioned earlier, SII has contractual obligations to other countries and COVAX to deliver a certain quantity of vaccines. In fact, SII may have already received advanced funding as part of those contracts. So, it seems only fair that the SII should be able to deliver on those contract terms.
However, SII needs export permission from the government to be able to ship vaccines out of the country. The government has temporarily halted all exports of covid vaccines given the domestic lack of supply and severity of need. In fact, last week it again denied SII’s request to export 50 lakh doses to the United Kingdom.
The situation in India may not improve in the months to come, and there is also the warning of a third wave that needs to be taken into account. A recent report suggests that this restriction may now last till October. On the other hand, Gavi, the vaccine alliance, has made it clear that it views the agreement with SII as a legally binding contract that has to be enforced. Astra-Zeneca has also sent legal notices to SII for delay in shipments. The international community has bet heavily on India’s vaccine manufacturers and extended import restrictions may not be taken too kindly.
Given this backdrop, a potential international legal wrangle looms ahead. A vaccine initiative that promised friendship may end in acrimony.
The idea for this piece came from a May 13 tweet by G Raghuram. In this tweet Raghuram talked about the Goodhart’s law in the context of the way Covid numbers are being reported.
In a 1975 article, the British economist Charles Goodhart had stated: “Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.” This came to be known as the Goodhart’s law. Of course, like many other laws in economics, the Goodhart’s law has also not been stated in simple English.
As Carl T Bergstrom and Jevin D West write in Calling Bullshit—The Art of Scepticism in a Data-Driven World: “While Goodhart’s original formulation is a bit opaque, anthropologist Marilyn Strathern rephrased it clearly and concisely: When a measure becomes a target, it ceases to be a good measure.”
As Bergstrom and West further explain: “If sufficient rewards are attached to some measure, people will find ways to increase their scores one way or another, and in doing so will undercut the value of the measure for assessing what it was originally designed to assess.”
Examples of this phenomenon can be seen across different facets of life. A business school I used to work for had started dozens of journals and magazines, without much quality control, to drive up its rankings and it briefly did succeed. This was because business school rankings gave some weightage to research carried out by the faculty of a business school and by having its own magazines and journals, it was easier to publish. This helped in driving up the ranking.
Now what does the Goodhart’s law have to do with the covid pandemic? As the covid pandemic struck and spread, different measures have been used to get an idea of its strength (for the lack of a better term). These include daily increase in covid cases, the total number of tests carried out in a district and a state, the total number of covid deaths, etc.
As per Goodhart’s law, these different measures have become targets. And that has led to different state governments trying to game these measures, in order to make themselves look good and tell the world at large that they have the covid pandemic under control.
Before I get into data and news reports, let me explain this through a very simple example. For a while, the daily increase in the number of covid cases in Nagpur in Maharashtra was much more than the increase in the entire state of Madhya Pradesh.
Anyone who knows Indian geography would know that Nagpur is right on the border that Maharashtra shares with Madhya Pradesh. It is not an island. People can move between the states. This anomaly wasn’t really explainable unless one looked at the Madhya Pradesh numbers from the lens of the Goodhart’s law.
One parameter that has been managed (or should I say fudged) by different states is the number of people dying of covid. The idea as I explained earlier is to tell the world at large that they have the situation under control. The trouble is that the governments may be able to manage the data, but they can’t always hide the dead bodies.
Crematoriums across the country have been working overtime. Public health expert Ashish Jha, offered a straightforward argument in a Twitter thread on May 9. As he wrote: “During [the] non-pandemic year 2019, about 27,000 Indians died on [a] typical day. Crematoriums handle that level of deaths every day. Additional 4,000 deaths won’t knock them off their feet. Crematoriums across the country [are] reporting 2-4X normal business.”
He further writes: “So best estimate [of] 55,000 to 80,000 people dying daily in India, If you assume baseline deaths of 25,000-30,000, Covid [is] likely causing additional 25,000 to 50,000 deaths daily, not 4,000.” As Anirban Mahapatra writes in Covid-19 – Separating Fact from Fiction: “During the pandemic many of these excess deaths are due to COVID-19.”
Many journalists and newspapers have found ways of going beyond the official numbers. Let’s take the case of Gujarat. The Divya Bhaskar newspaper has reported that the state has issued 1.23 lakh death certificates between March 1 and May 10 this year. It had issued around 58,000 death certificates during the same period last year. So, the number of deaths has more than doubled this year. As per Gujarat government’s data only 4,218 deaths happened due to covid during the period. This suggests massive underreporting. The Gujarat government has called this report inaccurate.
It would be unfair to suggest that this trend of underreporting covid deaths is prevalent only in Gujarat. An April 15 report on NDTV, during the early days of the second wave, said that for Lucknow, the “cumulative official covid death count released by the government in the last seven days is 124.” Nevertheless, as “per the records maintained by the city’s crematoriums, over 400 people who died because of the virus had been cremated,” during the period. The government explained away this difference by saying that those dying in neighbouring districts and states were also being cremated in the city.
A similar thing happened in Bhopal as well. Over a period of 13 days in April, the official covid death count stood at 41. Nevertheless, a survey carried out by The New York Times of the main covid-19 cremation and burial grounds in the city, revealed that more than 1,000 deaths had been handled under strict protocols. There was a similar newsreport on Kanpur as well.
In fact, the Financial Times, collected news reports across seven districts and found that the number of covid victims who had been cremated are ten times larger than the official covid numbers in the same districts. (Click on the above link to look at the graph).
Of course, other than such news stories, there have been a spate of photographs and videos lately, showing bodies washing up and then later buried on the shores of the Ganga river, flowing through Uttar Pradesh and Bihar. A Dainik Bhaskar news report puts the number at more than 2,000 bodies, with Kanpur, Unnao, Ghazipur and Ballia being worst hit. (Those who can read Hindi, I suggest please read this report).
Journalists have also been counting paid obituaries being published in newspapers, again suggesting a huge difference between the reported numbers and the actual state of things.
As Bhramar Mukherjee, an epidemiologist at the University of Michigan told the New York Times: “It’s a complete massacre of data… From all the modeling we’ve done, we believe the true number of deaths is two to five times what is being reported.”
There are several ways in which the undercounting happens. In Uttar Pradesh, in order to get admitted into a hospital, the patient required a reference letter from the Chief Medical Officer “who heads the Integrated Command and Control Centres set up by the government in all districts”. Due to this rule, patients were turned away from hospitals. And if such a patient died he or she wouldn’t be counted in the covid deaths.
A medical officer in Krishnagiri in Tamil Nadu told The Hindu: “We have been told orally in the meeting that only deaths within 10 days of admissions will be taken as covid-19 deaths.” MK Stalin, the new Tamil Nadu chief minister, has asked the state government officers not to fudge data.
The number of deaths also depends on how the counting is carried out. Take the case of West Bengal, where in May 2020, the “official’ coronavirus death toll… doubled in the five days since the state virtually shelved its Covid-19 death audit committee.”
Then there are cases where an individual dying of covid had not tested positive (hence, it was a case of a false negative). There are examples of such cases not being counted as well.
There are also cases of covid deaths being attributed to other health complications that individuals had when they got infected by the virus. These include diabetes, hypertension, cancer etc., which increase the risk of severe covid.
A news report on BMJ.com published in July 2020, pointed out that in Vadodra “death audit committees attributed nearly 75% of deaths in covid-19 positive cases to other causes such as complications from diabetes or following organ transplants.” All this is happening against the prevailing guidelines of the Indian Council of Medical Research.
People who die outside hospitals or on their way to one, aren’t counted in the covid deaths. Two thirds of registered deaths in India happen at home. In all around 86% of deaths in India are registered.
Even here there is a great deal of variation across states. In Bihar and Uttar Pradesh, only 34.6% and 60.8% of the deaths, respectively, are registered. As the disease spreads across rural Bihar and rural Uttar Pradesh, massive undercounting of both active covid cases and deaths, is happening.
The reluctance of politicians notwithstanding, the system itself is not geared up to count the dead, from covid or otherwise, in these states.
The biggest evidence of undercounting comes from the fact that the Prime Minister Narendra Modi recently said that the “states should be encouraged to report their numbers transparently without any pressure of high numbers showing adversely on their efforts”.
There are several reasons why the governments need to count the number of people dying because of covid, correctly.
First and foremost, people have a right to know what is happening in the country. It tells us clearly how the disease is progressing and helps us prepare accordingly, mentally, physically and financially.
Second, as I have often said in the past, if we don’t recognise a problem how do we work towards solving and/or containing it. With regard to this, Bhupinder Singh Hooda, a former chief minister of Haryana, made an important point in a recent column in The Indian Express, where he said:
“The Union government is allocating oxygen on the basis of the severity of the second wave in the state. If the state government underreports the numbers or fudges the data, it will harm, rather than help, the state as it will get a lower allocation of oxygen and more deaths will follow.”
Third, counting covid death numbers as accurately as possible is important for the overall health security of the world. No herd immunity can be achieved if the disease keeps spreading across India.
Fourth, the correct data helps epidemiologists run their models properly and then make projections that should help policy.
It also needs to be said here that historically during a pandemic, data is not always accurately collected. As Chinmay Tumbe writes in Age Of Pandemics (1817-1920):
“Death figures are collected on the basis of ‘registration’, which is a process that usually breaks down in a period of crisis, as observed by the health officials of those times. It leads to serious underestimation of the number of deaths, especially in poorer countries with weak data collection systems. In India, the Census of 1921 noted that due to ‘the complete breakdown of the reporting staff, the registration of vital statistics was in many cases suspended during the progress of the epidemic in 1918’.”
The mortality statistics of those who died in the pandemic that happened between 1918 and 1921, have been updated through various studies over the years.
Having said that, when it comes to data and data collection, things have improved by leaps and bounds over the last 100 years. Hence, even with the pandemic being on, data collection and management, needs to be carried out in a much better way.
Of course, all this is lost on a central government, which is primarily interested in narrative management. It is currently busy spreading the narrative that it had warned the states of a second wave.
But then it did nothing about it… Didn’t order enough vaccines… Didn’t make sure that there was enough stock of oxygen… Exported the vaccines being produced… Continued with the kumbh mela and the elections, both big super spreader events… And also told the world that India had managed to defeat covid.
In between all this we were also asked to bang utensils and eat dark chocolate.
The second wave of coronavirus continues to unleash its horror in India. This crisis has brought in focus the significance of mass vaccinations being carried out at a very quick pace. Without vaccinating a vast majority of our population against Covid-19, there is no pathway to normalcy and achieving herd immunity.
Policy-makers in India have finally awakened to this reality or at least that is what we hope. That they have been found so lacking – in planning, preparation, and priorities – speaks volumes of the caliber of our political and bureaucratic class.
As a piece in The Times of India, dated May 10, points out, at the current rate of vaccination, it will take around 1,000 days to vaccinate the adult population of 94 crore (around 94.3 crore to be precise). But assigning blame will not solve this crisis. Timely, considered action and policies might.
In this article, we try to assess the logistical readiness of a mass vaccination plan by looking at the capabilities and capacities at each step of the vaccination process. Specifically, we look at current and future vaccine supplies and discuss key issues related to vaccine administration.
There are two vaccines available in India currently – Covishield manufactured by the Serum Institute of India (SII) and Covaxin manufactured by Bharat Biotech. In addition, we will be importing Sputnik V from Russia starting this month, with a small amount already having come in, and are likely to receive shipments of Astra-Zeneca vaccines from the United States. Also, Zydus Cadilla has announced that it expects to get emergency authorisation for its 3-dose vaccine shortly.
The table below lists the different vaccine sources and their estimated/committed doses for the next six months. Projections beyond October are subject to too many assumptions which can lead to wide variations in estimates. For now, a six-month planning and estimate window seems appropriate. Even then, these are estimates that may prove to be incorrect.
Let’s discus the above table in a little more detail.
These are broad estimates derived from publicly available information as on May 7, 2021. The intent behind this exercise is to consolidate information emerging from various sources to provide a coherent and a reasonable picture of the vaccine supply scenario.
There might be major changes in either direction, that is, actual supply might increase due to new production or distribution agreements or actual supply might decrease if manufacturers are not able to deliver to their committed/planned volume. As we said earlier, this is a broad estimate.
1)The estimates for Covishield are based on their total production capacity projections given by Adar Poonawalla, the CEO of Serum Institute of India (SII). SII’s current production capacity is between 6 to 7 crore per month. We have assumed it to be at 6.5 crore per month. By July, SII expects to raise its production to 10 crore, as reflected in our estimates starting August. We assume that an increase in production will start hitting the market in the next month.
On April 28, 2021, the government of India placed an order with SII for 11 crore doses for May, June and July. Over and above this, SII has announced that it has a separate order of 11 crore doses from state governments and private hospitals. But the delivery schedule for those orders is not publicly known.
To add another layer of ambiguity on the demand side, SII is also obliged to export 20 crore vaccine doses in 2021 as part of its agreement with Astra-Zeneca and World Health Organization. Currently, vaccine exports have been halted due to the domestic crisis in India. It is possible that export of Covishield doses will resume once the crisis abates. In fact, 5 million doses of the Covishield vaccine which were to be exported to the United Kingdom have now been made available for inoculating those in the 18-44 age group.
Thus, our estimates allocate the entire production of Covishield for domestic use. Please note that if export of Covishield vaccines resumes, the actual supply numbers for India will be lower than estimated numbers.
Currently India faces a supply problem. In May, the supply of vaccine doses is expected to be around 8-9 crore. As one of us had earlier estimated, the total number of vaccine doses needed to vaccinate the remaining part of India’s adult population, stands at around 178-190 crore doses. The gap between what is available as of now and what is needed, explains the prevailing chaos when it comes to vaccines.
2)For Covaxin, once again, our estimates reflect the total monthly capacity. Bharat Biotech, the makers of Covaxin, have announced that they will be able to ramp up their annual production capacity to 70-80 crore vaccine doses by July. In an interview given in late April, Krishan Ella, the CEO of Bharat Biotech had remarked:
“Last month we produced 1.5 crore doses, this month we are reaching 2 crore doses, next month we will be making around 3 crore doses followed by 7 to 7.5 crore doses. We are ramping up the production and by July-August we will be able to reach 70 to 80 crore doses production capacity per annum.”
Using this as a guideline, we have budgeted 2 crore Covaxin doses for May, which ramps up to 3 crore in June, rising to 6 crore doses per month starting in July (6 crore per month x 12 = 72 crore per year).
3)The first pilot batch of 1,50,000 doses of the Russian Sputnik V vaccine, was shipped to the Hyderabad based Dr Reddy’s Laboratories in early May. We have not counted those since the number is too small for this estimation exercise. As per the agreement between Russian Direct Investment Fund which is marketing the vaccine and Dr Reddy’s, 12.5 crore doses are to be imported to India between April and June 2021 .
We have split that number up from June to September (12.5 crore/4 = 3.13 crore), given that a bulk of these vaccines have not been delivered as yet . For October, we have kept the number at 3.13 crore. It is likely that the Sputnik V dose availability might go up after a few months since six local manufacturers are supposed to manufacture 75 crore doses of the vaccine after the initial batch of imports. The timing of the locally manufactured Sputnik V is difficult to predict. So, as a rough estimate we have retained the 3.13 crore figure for October as well.
4)It is likely that the US might begin to share some of the stockpile it has of the Astra-Zeneca vaccine, with India. We have estimated that to be 1 crore doses a month, starting in June.
5) Zydus Cadilla is expecting to get an approval for its three dose Covid vaccine in May. Their initial production capacity is slated to be 1 crore doses per month, which is expected to rise to two crore doses per month. Given that the vaccine has not yet been approved we stick with the initial capacity of one crore doses.
This vaccine is a three dose vaccine, hence, the “value” of a single dose is two-thirds of the other vaccines – all of which are two dose vaccines. Thus, the equivalent monthly supply estimate for Zydus Cadilla is 0.67 crore (two-thirds of one crore).
6)Another indigenous vaccine made by Biological E based in Hyderabad may become available in August. Since the vaccine hasn’t been approved yet, we have not included it in our supply estimates.
7) During any vaccination drive, some amount of vaccines get wasted due to improper handling, theft and human errors. The following chart shows the rate of vaccine wastage in a few states as of May 10.
Source: Ministry of Health and Family Welfare.
We have not included wastage in our analysis to keep things slightly simple. Having said that, doses lost due to wastage will decrease the available supply for inoculation.
Finally, with these caveats, we can say that there will be a supply around 102 crore additional vaccine doses between May and October 2021. What this means is that vaccines will continue to be in short supply in the short-term.
The efforts highlighted above to get the various vaccines available in India are all positive steps. But as the numbers indicate, the supply pipeline is not adequate to meet our vaccination needs of close to 180 crore vaccine doses.
The primary reason for this shortage is that the government of India waited too long to place vaccine orders and when it did, it didn’t order enough doses. This can be seen in the chart below that compares the vaccination order timelines for different countries.
Now let’s take a look at the possible steps that can be taken to augment the vaccine supply.
A supply of more than 100 crore doses of different vaccines by October, if achieved, will be no mean feat. But even that is not fast enough given our vast population. The following steps can be taken to increase the supply of vaccines. These are medium term solutions and will likely yield results over the 6-12 month horizon. This means that the supply of vaccines will continue to be an issue over the next few months.
1) The central government should work closely with both SII and Bharat Biotech to enable them to hit maximum production capacity. Additionally, both manufacturers should be asked to furnish a weekly supply schedule for better planning and coordination, if that is not already happening. With multiple buyers in the mix now (with state governments and private hospitals) such a supply schedule assumes even greater significance.
2)India is the vaccine manufacturing headquarters of the world. According to Central Drugs Standard Control Organisation, there are 18 private and three public sector vaccine manufacturers in the country. One potential route to increase vaccine supplies is to leverage spare local vaccination manufacturing capacity to increase supply of Covaxin using licensing and/or royalty agreements with Bharat Biotech.
The intellectual property for Covaxin is jointly owned by Bharat Biotech and the Indian Council of Medical Research (ICMR), a government body. In fact, an arrangement along this line is already in motion where the Mumbai based Haffkine Institute, one of the oldest biomedical research institutes in the country, has been granted permission by the central government and funding by the Maharashtra government to start production of Covaxin.
Vaccines production from this plant is expected to take atleast one year. Other efforts, similar to this could be spawned with other vaccine makers after an assessment of technological and supply chain feasibility. However, based on the Haffkine timeline, it is clear that such efforts will not help in the short term. Having said that, we don’t know if the current wave is the last wave of Covid.
3)India can import additional vaccines from the United States. The United States has a contract with Astra Zeneca for 30 crore doses of which six crore doses are either in stockpile or will be shortly available. Since the Astra Zeneca vaccine has not been approved in the US, India can apply a concerted effort – both diplomatically and/or financially- to receive a substantive portion of the stockpile.
India should also look at importing additional vaccines directly from vaccine makers. The Municipal Corporation of Greater Mumbai has such plans.
Among the major vaccines approved and in use elsewhere, the Johnson and Johnson (J&J) vaccine is the most attractive given that it is a single-shot vaccine and it does not need extreme cold storage. The J&J vaccine may not be the best use of taxpayer money, but one that private companies could pursue and make available to the general public at a higher cost.
Vaccine supplies are no good if they don’t translate into inoculation. En-masse administration of vaccines depends on several factors including number of vaccination sites, available personnel, location of sites, and public willingness to get vaccinated. Let’s look at this in some detail.
The following chart shows weekly vaccination rates in India.
Here are some observations from the above graph.
1) The vaccination rate was quite low till early March. The spread of the second wave of covid clearly catalysed the public into action and the vaccination numbers rose steadily till the first week of April, barring a small dip towards the end of March.
From just over 4 lakh vaccinations in the week of February 27 to March 5, numbers jumped to almost 2.5 crore in the week of April 3 to April 9. After hitting that peak, numbers have dropped down to around 1.15 crore vaccines for first week of May. This is a drop of around 54% over just one month. As covid has spread, our vaccination rates have been dropping. Vaccine supply shortages are mainly responsible for this drop in inoculation in recent weeks, and the lockdown imposed across large parts of the country may also have contributed to this.
2)The peak rate of around 2.5 crore weekly vaccines is an important statistic. It translates to a monthly rate of 10 crore vaccines – more than the projected supplies for May but about 30% short of the projections for June. What this tells us is that the distribution capacity can handle the imminent vaccination volume, but will need to start ramping up soon to keep up with the projected supply.
3) According to the Cowin dashbord, as of May 7, there were 58,214 vaccination sites (55,822 government sites and 2,292 private sites). Along with using government hospitals in the urban centres, the government has wisely activated the rural healthcare system for vaccine delivery as well.
The rural healthcare delivery system in India is a three-tier system. The smallest unit, called sub-centres, are health outposts which are meant to be the first contact point between the community and the healthcare system. A group of sub-centres are served by a single primary health centre which has a doctor (medical officer) and nurses on staff. A group of primary health centres feed into a community health centre– which is akin to small hospital with specialist doctors and diagnostic equipment.
A study of the vaccination sites in different states on the Cowin dashboard reveals that many states are using sub-centres, primary health centres and community health centres, as vaccination sites. The rural population is being targeted here.
However, as is often the case, enterprising citizens often outthink policy makers, resulting in unanticipated policy outcomes. In this case, there are reports that urban Mumbaikars, who are digitally more savvy than the rural folks, are showing up in rural areas to get vaccinated. This phenomenon highlights the need to make the registration process more accessible to all.
Now let’s look at state wise vaccination data. As of May 7, 2021, around 16.75 crore vaccine doses had been given. How do different states compare in this vaccine drive? The table below provides some insights.
In the above table, we show the five states that are performing the best and five that are performing the worst when it comes to vaccination rates, among states which have a population of over 1 crore.
Uttar Pradesh has the worst vaccination rate, where only 4.6 % of the population has gotten at least one dose of the Covid vaccine, and just above 1% has been fully vaccinated. It appears that the energy spent by state leadership in image management, has come at the expense of an effective vaccine roll-out strategy.
Bihar, Assam, Tamil Nadu and Jharkand, are the other laggards with no state having fully vaccinated over 2% of their population (except Tamil Nadu which is marginally over 2%). In case of Assam and Tamil Nadu, among other things, the recent state assembly elections may have been responsible for low vaccination rates.
Among states that are doing well, Kerala and Gujarat – with their oft-cited competing models of development – are doing remarkably similar when it comes to vaccinating their people. Uttarakhand, Jammu and Kashmir, and Rajasthan, are the other vaccination leaders.
The ratio of folks fully vaccinated is not starkly different between the leaders and the laggards – 4.83% for Gujarat vs 1.17% for UP – but the figures for people with one shot taken does show a significant difference (17.28% for Kerala vs 4.59% for UP).
Till the end of April, states were dependent on the centre for getting vaccines. So, the discrepancy in vaccination rates is likely to have been a function of the centre’s distribution decisions, as well. The central government has not released the criteria used for vaccine distribution to the states, something that they should be doing for transparency and efficacy auditing.
Having said that, Gujarat has clearly been a beneficiary of the allotment mechanism, receiving the highest quota of vaccines from the centre after taking its population into account. As an April 19 newsreport on moneycontrol.com points out:
“As on April 8, the supplies to Maharashtra covered just about 8.5 percent of the population. For Delhi, it was 10.4 percent. On the other hand, Gujarat, which can’t be regarded as the most impacted state if one goes by official numbers, had got enough vaccines for 16.4 percent of its population – the highest.”
It appears that when it comes to competition between states, Prime Minister Narendra Modi continues to root for his home state.
Starting May 1, the state governments can procure vaccines directly from the manufacturers. Having states compete for what is essentially a fixed supply isn’t a great idea since it will not increase the total vaccines available nationwide. Instead, the states and private corporations will fight over the 50% pool that has been de-regulated.
So states that have more leverage with vaccine makers or more financial clout/headroom stand a better chance of pulling ahead in the vaccination race. It will be interesting to see the trajectory of vaccination rates of different states as they begin to place their vaccine orders in the coming weeks and months. Also, this is clearly creating an access problem for the poor.
As the supply of vaccines increases in the coming months, the question is do we have enough health care workers and vaccination sites to keep up with supply.
First, let’s look at the manpower question. As per the Fifteenth Finance Commission Report tabled in February 2021, there were a total of around 27 lakh healthcare workers in India in December 2017. These include registered nurses (RN), registered midwives(RM), lady health visitors (LHV) and auxiliary nurse midwives (ANM). Specifically, there were 20,48,979 RNs and RMs, 56,469 LHVs and 8,60,927 ANMs, serving in the country. All these healthcare workers are capable of administering a vaccine.
Now, consider a full-throttle vaccination campaign with 1 crore doses/day. Assuming that a healthcare worker administers 50 doses a day, we would need 2 lakh healthcare workers which is less than 8% of the total available personnel. Thus, it is evident that labour won’t be a bottle-neck to ramp up the vaccine drive.
Next, let us look at how many potential vaccination sites are available. Recall that currently, around 61,000 sites are being used. As per the Rural Health Survey of 2019, there are 1,57,411 sub-centres, 24,855 primary healthcare centres and 5,335 community health centres, across the country.
Thus, even without counting government hospitals and private clinics, there are over 1,87,000 potential vaccination sites, almost three times than are being currently used. Thus, vaccination sites also are not limiting factors in scaling up vaccine delivery.
One potential hindrance in getting maximum number of people to sign up for the vaccines is the current vaccination registration process. A huge rush for vaccines has made the signing up process a bit of a lottery. In fact, techies have resorted to writing scripts to alert them when an elusive spot opens up. For everyone else, the process consists of repeated tries on loop.
One major problem experienced by folks trying to sign-up for a vaccine is the non-receipt of a one-time password (OTP). The OTP is a pre-requisite to move ahead in the registration process, and many folks have been unable get past the OTP step. Technical glitches in the early stages of an app/website roll-out are not unheard of, but given the importance of this issue, one would have expected the “routine” bugs to have been ironed out before mass adoption.
That such glitches are so widespread indicates that the en-masse registration was not planned with adequate lead time. Here too, like most aspects of the Covid response, the government’s lack of readiness is being exposed.
The online registration will likely smoothen out over time, but currently it only caters to the internet-savvy comfortable in English. Online sign-ups may not totally work for all folks, both rural and urban. Systems that allow a registration method that is appropriate and accessible for those not comfortable with the current digital setup, need to be created. .As a start, the Cowin registration website needs to become multi-lingual.
The language barrier automatically excludes the majority of the country. As per the 2011 Census, only around 13 crore people identified English as first, second, or a third language. It is mind-boggling that the government decided to offer the registration process only in a language that the vast majority does not understand. That the registration process cannot support the major Indian languages, is again a sign of a system put together in haste.
Vaccine hesitancy can also potentially derail the entire vaccination drive. If too many adults choose not to sign up for the vaccine, it won’t be possible to reach herd immunity quickly. In some ways, the severity of the second wave makes the most compelling argument for the need to vaccinate. Yet, for a variety of reasons, people tend to be hesitant.
Safety concerns, efficacy concerns, and ignorance (wilful or genuine) about the seriousness of Covid-19, are prime reasons that drive this hesitancy. WhatsApp messages and fake news exacerbate the psyche of suspicion and distrust. The best anti-dote to that is positive messaging and increased awareness about the benefits of vaccination. Given this administration’s core competence of narrative management, mass communication to encourage vaccine enlistment should not be a big hurdle.
As a more directed policy step to incentivise vaccinations, especially in rural areas, the central government could consider linking a Public Distribution Service (PDS)-based benefit with a vaccination dose. For example, for each vaccine dose a voucher for a few kgs of rice/wheat, which can be redeemed at the local ration shop, can be given.
This should not cost the central government much (other than perhaps transport and administration) since the Food Corporation of India storehouses are overflowing with way more grain than the strategic and operational buffer that needs to be maintained.
The pathway to a fully vaccinated Covid free India is not easy and won’t happen overnight. But, with proper planning and execution, we can make significant progress over the next several months. We all need to do our bit to succeed in this effort.
Honestly, I didn’t want to write this piece. But when a cabinet minister of the government of India uses basic maths to mislead, it didn’t leave me with much of an option.
Here’s what Dr Harsh Vardhan, who is the minister of health and family welfare and science and technology, tweeted earlier in the day today.
Regular readers would know how much I hate when people don’t know when to use percentages and when to use absolutes. Or the fact that they know and still do it, to mislead.
Harsh Vardhan’s tweet has multiple problems. Let’s look at it pointwise.
1) The minister points out that the government of India has provided more than 18 crore vaccines free to states for vaccination. This is for vaccinating people who are 45 or more. So far so good. The thing is that India has the second largest population in the world. As per the World Bank it was at 136.64 crore in 2019, with China’s population being at 139.77 crore. With China’s population barely growing and ours continuing to grow, by now, we might be within the touching distance of China to become the country with the largest population in the world.
So, when it comes to things that need to be provided to all the population or a significant chunk of it, India is bound to be at the top. Also, vaccinating the population is not a race. It is the right thing to do.
2)Given this, it makes sense to look at what proportion of the population over the age of 18 has been fully vaccinated, meaning it has gotten both the doses of the vaccine. That’s a useful metric.
As I write this, the dashboard on the Co-Win website tells me that 3.56 crore individuals have taken both the doses. There are around 94.3 crore Indians who are aged 18 and above. This means that around 3.78% of the population (3.56 crore expressed as a percentage of 94.3 crore), for whom vaccines are available, has been vaccinated.
Yes, you read that right. Less than 4% of those age 18 or above, have got both the doses of the vaccine. Of course, this explains why Dr Harsh Vardhan’s tweet is an absolute number and not in percentage terms. This situation prevails nearly four months after the vaccination programme started.
That’s the real figure to look at simply because the aim of vaccination is to achieve herd immunity. As Ryan A Bourne defines herd immunity in Economics in One Virus as “a situation where enough people have immunity that any further outbreak of the virus fails to accelerate because there are too few individuals susceptible to infection.” Vaccinating a significant chunk of the population moves us towards the situation. And we are nowhere near that, the world’s largest vaccine drive notwithstanding.
Data from the Financial Times, tells us that there are many nations in the world who have vaccinated a significant chunk of their population. This includes smaller nations like Israel and larger ones like United States. Very few countries where covid has spread as much as it has in India, have got a rate of vaccination as low as it is in the Indian case.
3)Also, what Dr Harsh Vardhan’s tweet does not tell us is that the rate of vaccination has been slowing down majorly over the last one month. During the week April 3 to April 9, the total number of vaccinations carried out stood at around 2.48 crore doses (includes both the doses). This has fallen every week since then and stood at around 1.16 crore doses, during the week May 1 to May 7. This fall of over 53% has happened primarily because the government was busy with elections and didn’t order enough vaccines until April 28, 2021.
4)When it comes to receiving the first dose, 13.49 crore Indians or 14.3% of the population that is being vaccinated has got the vaccine. On this parameter things look a little better for India.
To conclude, vaccinating a significant chunk of India’s population to achieve herd immunity, remains a real challenge. Further, while everyone cannot be vaccinated within a short-period, but misleading the country on it by misrepresenting data is not going to help anyone in anyway.