📰 Unfair and dangerous: On vaccine inequity
Vaccine inequity will make containment measures more difficult
•In the midst of a raging second wave, which is touching new peaks each passing day, the Central government has abdicated its responsibility to ensure vaccine equity through free vaccination for the poor across all age groups. While State governments were never consulted or given prior notice about the change in vaccination policy, giving the two vaccine manufacturers a free hand to decide the price at which vaccines will be sold to State governments has made universal COVID-19 vaccination a difficult task to achieve. A large percentage of those aged 18-44 years does not have the resources to pay for vaccines and hence will fall through the cracks. So, the States will have to take a leading role in the free immunisation programme. While nearly two dozen States have already committed to vaccinate for free the target population, it remains to be seen if they use any criteria to identify the beneficiaries. Never before has universal immunisation of nearly 600 million people been left to State governments and the private sector while the Union government restricts itself to vaccinating for free just 300 million. With this precedent, States will probably be required to vaccinate children too, when vaccines become available, thus burdening them even further and thereby actively promoting vaccine inequity. If making States pay for vaccines is an ill-conceived idea, forcing them to shell out more than what the Union government pays for the same vaccines is a sure recipe for exacerbated vaccine inequity. With vaccination being the only safe way to end the pandemic, undertaking any exercise that leaves a large population unprotected will cost the country enormously in terms of lives and livelihoods.
•While the Union government has already allocated ₹35,000 crore for COVID-19 vaccination in this Budget and also committed to provide further funds if required, it will spend less than ₹10,000 crore to vaccinate for free all above 45 years. While the sudden change in policy is therefore not due to lack of financial resources, the State governments, which have not factored in funds for vaccination, will now be required to garner funds for the same. There is hence a great compulsion to make pricing more transparent and allow States to collectively bargain for a lower price and assured timelines to receive supplies. The current policy, which has earmarked 50% supplies to State governments and private hospitals, takes the States and the companies to a completely uncharted territory leading to competition among States, and between State governments and private hospitals. Vaccine shortage from both manufacturers is likely to last a few months. The combination of policy pandemonium, profiteering by vaccine manufacturers in the thick of the pandemic and vaccine shortage is unlikely to result in a smooth roll-out of vaccines for the target group. This could lead to a dangerous situation where containment and mitigation measures become even more difficult.
The proposal for a minimum global corporate income tax could be a game changer
•United States Secretary of the Treasury Janet L. Yellen’s proposal for global coordination of corporate taxation has huge implications. She has proposed a global minimum tax rate. If the major world economies agree and the U.S. Congress approves the increased tax rates, it would constitute a reversal of the trend in tax policies since the collapse of the Soviet Bloc 30 years back. Would Ms. Yellen succeed in convincing OECD countries and the U.S. Congress? David R. Malpass, President of the World Bank, representing the interest of global capital, has voiced his opposition. He was shooting from the shoulders of the poor countries when he said the proposal “...would hinder poor countries’ ability to attract investment”.
•The initiative which has been long overdue is being forced on the rich countries by the impact of the pandemic. Presently, governments need resources to help people through transfer of incomes, provision of more public services and also prevent business failures. But their resources have been adversely impacted by the economic downturn. Consequently, fiscal deficits have reached record high levels. In the pre-pandemic era, such levels of deficit would have led to the tanking of the stock markets but now they are booming in anticipation of demand being pumped in by these high deficits. The result is a massive increase in inequality between those who have gained in the stock markets and those who have lost employment and incomes.
Massive deficits in the budget
•The Joe Biden administration is proposing a massive $3 trillion package to boost the economy. A large part of this will be spent in 2021 but some of it will be staggered. This will be in addition to the $1.9 trillion package of relief already approved soon after the Biden administration took office. This package came after former President Donald Trump signed on the $900 billion stimulus package in end December 2020 and more than $2 trillion in mid-2020. Thus, in addition to the pre-existing deficits in the budget an additional 15% of GDP is being added in both 2020 and 2021. These are unprecedented levels.
•Additional tax collections can help reduce these large deficits and that is the reason for the U.S. administration’s current proposal. But businesses and conservative legislators will resist. However, some rich Americans like Jeff Bezos have supported the idea of taxing the rich more. Such proposals have been around since 2011 when many of the rich in the U.S. and Europe had supported higher taxation on the rich. Warren Buffet had floated this proposal to strengthen capitalist economies after the global financial crisis of 2007-09. Subsequently, this proposal has come up several times. But, instead of raising the tax rate on corporations, the Trump administration cut the highest marginal tax rate from 35% to 21% with effect from January 1, 2018. This gives a hint as to why it is both difficult to raise corporation tax rates and why Ms. Yellen has proposed a global agreement on corporate taxation.
•When the Soviet Bloc collapsed in 1990, nations in east Europe were badly hit and needed capital infusion to overcome their economic woes. To attract global capital, they cut their tax rates sharply. This resulted in a ‘race to the bottom’. Nations in Europe were forced to cut their tax rates one after the other to not only attract capital but also to prevent capital from leaving their shores. This had global implications.
•Nations became short of resources and cut back expenditures on public services and encouraged privatisation. Governments lacked resources for education, health and civic amenities. The developing countries followed suit even though private markets do not cater to the poor. Thus, disparities increased within nations.
BEPS and loss of revenue
•The world experienced Base Erosion Profit Shifting (BEPS). Namely, companies shifted their profits to low tax jurisdictions, especially, the tax havens. For instance, many of the most profitable companies like Google and Facebook are accused of shifting their profits to Ireland and other tax havens and paying little tax. EU has levied fines on Google and Apple for such practices. Former U.S. President Barack Obama in 2009 had said that the U.S. was losing $100 billion in taxes due to such practices.
•Since all the OECD countries have suffered due to cuts in tax rates and BEPS, initiatives have been taken to check these practices. But they will not succeed unless there is agreement among all the countries. Any country facing economic adversity can cut its tax rates to attract capital and force others to follow suit. India has also cut its tax rates since the 1990s. Most recently in 2019 the corporation tax rate was cut drastically to match those prevailing in Southeast Asia. Such cuts have implications for both inequality as well as for funding the schemes for the poor and the quality of public services.
The regressive tax structure
•Another implication of the reductions in direct tax rates has been that governments have increasingly depended on the regressive indirect taxes for revenue generation. Value-Added Tax and Goods and Services Tax have been increasingly used to get more revenues. This impacts the less well-off proportionately more and is inflationary. Direct taxes tend to lower the post-tax income inequality. The rising inequalities result in shortage of demand in the economy and to its slowing down which then requires more investment and that calls for more concessions to capital. However, that does not guarantee revival because investment in response to a tax cut is uncertain. Instead, increased government expenditures are sure to raise demand.
•Global financial capital which is highly mobile has effectively used tax havens and shell companies to shift profits and capital across the globe. This mobility has enabled it to extract concessions from countries by making them compete with each other to match the concessions given by another — that is the ‘race to the bottom’. So, without global coordination, corporation tax rates cannot be raised.
•The U.S. is crucial to this coordination — without its cooperation and agreeing, other countries cannot raise the rates. Now that the U.S. is taking the lead, perhaps this will happen even though it will not be easy given the clout of global capital in the corridors of power in all countries. There will also have to be cooperation among countries to tackle the lure of the tax havens by enacting suitable global policies. The impact of all this will be far-reaching impacting inequalities, provision of public services and reduction of flight of capital from developing countries such as India and that will impact poverty. So, a global minimum tax rate is worth a try in spite of the objection raised by the World Bank President.
📰 Undermining ‘vaccination for all’
The new vaccine strategy raises questions, beginning with the Centre giving up its control over the market for vaccines
•Just when the spread of COVID-19 has reached catastrophic proportions, with the daily case-load rising faster than that seen anywhere in the world since the beginning of the novel coronavirus pandemic, the Government of India has acted by unveiling a completely revamped vaccine strategy. Two key elements are the hallmark of this new strategy, which will be implemented from May 1. First, the phased roll-out of the vaccination drive initiated on January 16 under which the vaccine-eligible sections of the population were gradually increased, has now been extended to the entire adult population, namely, to those above 18 years. Second, and more importantly, a significant deregulation of the vaccine market has been effected and vaccine manufacturers have the freedom to sell 50% of their vaccine production to State governments and private hospitals, and at prices that can be substantially higher than that hitherto fixed by the government. A third element of the vaccine strategy, which was not announced formally, is a grant of ₹45 billion to the two vaccine manufacturers, the Serum Institute of India (SII) and Bharat Biotech, to boost their capacities.
Handing over the reins
•The new vaccine strategy raises a number of questions, not the least from the manner in which the central government has given up its control over the market for vaccines, a key feature of the vaccine roll-out plans thus far. This issue assumes further significance since the Government of India is well aware, as all public authorities around the world are, about the significance of vaccinating every citizen in the country; “none of us will be safe until everyone is safe”. It is, therefore, vitally important that public health authorities in the country take an objective view of the realities of the country before adopting strategies for vaccine availability, for this is absolutely critical for resetting lives and livelihoods disrupted by the pandemic. Several facts suggest that this has not done while rejigging the extant vaccine strategy.
Vaccine exports
•The phased roll-out of the government’s ambitious vaccination drive, beginning with health-care and frontline workers in January, followed by the gradual inclusion of senior citizens and people above 45 years in March and April, respectively, was in sync with the availability of vaccines in the country. Although SII, the largest vaccine producer, had initially promised to supply 100 million doses of vaccines a month, in reality it could provide between 50 million to 60 million doses. But, given that India too saw a degree of “vaccine-scepticism”, the Government of India found itself in a situation where it could promise exports of vaccines to 95 countries, mostly in Africa and Asia. As of April 26, these countries have received more than 66.4 million doses of vaccines from India.
•Until now, nearly 142 million vaccine doses have been administered in the country, the third highest in the world. However, in terms of population share, less than 2% has received both vaccine doses, while less than 9% has received one dose. But there is one worrying facet, which is that a demand-supply mismatch has begun to appear as the coverage of the vaccine-eligible population expanded. The largest supplier, SII, gave two explanations for its inability to meet its commitments. The first was that the United States Government had used a Cold War piece of legislation, the Defense Production Act, to restrict exports of vaccine culture and other essential materials. Second, the company complained that it lacked the financial capacity to expand its production, requesting a grant of ₹30 billion from the government.
Onus on States
•It is the face of this vaccine supply-crunch that the government has announced the new vaccine strategy, by opening vaccination to all adults in the country, and allowing vaccine producers to sell 50% of their production directly to State governments and private hospitals. The new strategy shifts the onus onto the State governments, which have to take decisions regarding free vaccination for people above 18 years, while the central government would continue to support vaccination for people above 45 years, and health-care workers and frontline workers. The government has not fixed the vaccine prices and has allowed the producers to pre-declare the prices they would charge from the State governments and private hospitals, a sharp departure from the extant strategy.
•Thus far, government facilities have provided vaccines free of cost, while private facilities are allowed to charge no more than ₹250 per dose. The central government played the role of a sole procurement agency that helped in driving down prices, thus addressing the issue of affordable access to vaccines. However, the new strategy abandons this mechanism and fragments the market into three layers namely, central government procurement, State government procurement and the private hospitals. This layering of the market would allow the producers to charge high prices from the State governments and private hospitals. In fact, both SII and Bharat Biotech have immediately announced their intentions to raise vaccine prices. SII will sell Covishield to State governments and private hospitals would have at ₹400 and ₹600 per dose, respectively, while the corresponding figures for Bharat Biotech’s Covaxin are ₹600 and ₹1,200 per dose.
•The new strategy would shift the burden of vaccination of the young population, namely, those between 18-44 years, entirely on the State governments. This implies that the vaccination of a significant section of the population depends on the financial health of each State government, resulting in inequitable access to vaccines across States. Moreover, given their poor state of finances, most State governments may not be able to procure the required number of vaccine doses to meet the demands of the targeted population. In such a situation, a large share of the vaccine quota (50% of domestic production) earmarked for the State governments and the private hospitals could end up with the latter.
In the U.S.
•The decision to substantially deregulate the vaccine market raises serious questions in view of the reported advance of ₹45 billion made by the Government of India to the two vaccine producers in India for expanding their production capacities. The Federal government in the United States has done similarly, providing financial support to vaccine producers, who are now set to rake in their billions by charging high prices. Several public interest groups in the U.S. have asked questions as to why the tax-paying public should bear the high prices of vaccines when Federal taxes have been used to beef up the vaccine producers. This question is more pertinent in India, where access to affordable vaccines is critical for ensuring “vaccination for all”.
More open licensing needed
•It is somewhat ironic that the new vaccine strategy, which could undermine “vaccination for all”, comes from a country that has long championed the cause of access to affordable medicines in international forums. Rather than hand over the reins of price determination to the duopoly in the vaccine market, the government should have urgently addressed the serious doubts over affordability of vaccines by ensuring a competitive market for vaccines. According to recent estimates, existing producers in India will be unable to meet the country’s vaccine requirements by some distance, and therefore, India needs more vaccine manufacturers to ensure uninterrupted supply. One positive step that the government has taken in this direction is to increase production of Bharat Biotech’s vaccine through the involvement of three public sector undertakings, including Haffkine Institute. We would argue that there is a need for more open licensing of this vaccine to scale up production. This would enhance competition in the market, enabling the vaccines to reach every citizen in the country.
📰 Protecting the police
The special insurance cover of ₹50 lakh must be revived and extended to all front-line workers
•Before the police could get fully vaccinated, the second wave of COVID-19 hit India more severely than anyone could have expected. Curfews and lockdowns have been imposed again in some regions to break the chain of transmission, but the challenges for the police are more varied and serious now.
Challenges for the police
•Last year, most of the problem was limited to migrant labour following the nationwide lockdown — providing them ration, transport, and inter-State passes. The pandemic being the first of its kind for the current generation, the police faced a tough time enforcing the rules that came with various lockdowns. The punishment for violating COVID-19 protocols and lockdowns was kept mild.
•The police had other challenges too: there was a spurt in cases of cyber-fraud, particularly those relating to online purchases and phishing. The Supreme Court, in pursuance of a suo moto petition, ‘In Re: Contagion of Covid-19 Virus in Prisons’ (2020), instructed High Courts to decongest prisons in the wake of the COVID-19 outbreak by releasing convicts on parole and under-trial prisoners (charged with offences punishable with maximum punishment up to seven years) who were in jail for three months or more on temporary bail. Except for a few instances of criticism here and there, the police received appreciation for its perseverance and sympathy for others.
•The situation appears to be more fearful and grimmer this time. With the steep spike in cases in just a fortnight, the number of hospital beds, ICU beds, medical oxygen, and drugs seems to be short of the rising demand. Though the administration is trying its best to diffuse the situation by coordinating with various stakeholders, panic in certain pockets doesn’t appear to subside. The role of some mediapersons and social activists needs special mention here as they have kept the hopes alive for many desperate people by extending a helping hand in time.
•Another area of concern has been the disposal of bodies by the State authorities as per COVID-19 protocols. This is sometimes delayed due to the limited capacity of cremation grounds. Relatives are not able to bid adieu to their loved ones and perform their last rituals. Their agony is beyond redemption.
Facing the brunt
•Needless to say, apart from healthcare workers of course, the brunt is being faced by the police, whether it is in tackling the menace of people hoarding scarcely available medical products or maintaining public order in front of hospitals. In addition to enforcing lockdowns and maintaining order, the police continue to perform their regular duties as well. In case an apprehended criminal is found COVID-19 positive, he needs to be quarantined before being produced before a magistrate. In heinous offences like murder and rape, arrests cannot be deferred. According to the prevalent jail protocol, criminals are permitted entry only if they test COVID-19 negative.
•The probability of policemen who are effecting arrests catching the infection is very high. So, for a policeman, being safe while being on duty is becoming difficult. Many policemen have succumbed to COVID-19 and numerous others are getting infected while helping others. According to a tweet on March 16, 2021 by the Indian Police Foundation, 1,207 security men (including policemen of the State police and Central Armed Police Forces personnel) have died of COVID-19 and more than 2 lakh have been infected. Their families also remain at a higher risk. The scheme of special insurance cover of ₹50 lakh, notified for the medical fraternity last year for a limited period of three months, must be revived and extended to all front-line workers (including the police) this time.
•The challenges during the second wave of this pandemic have increased manifold. But despite facing various hardships, the police consider themselves fortunate enough to have been entrusted with the solemn duty to serve the needy and poor in difficult times.
📰 COVID-19’s triage challenge
This time-tested, effective strategy could help tackle COVID-19 but poses unique challenges in India
•The second COVID-19 wave has hit India with great ferocity. It’s déjà vu and more. Family, friends and colleagues are infected, hospitals are flooded with patients, there is a shortage of beds, and ambulances are screaming through the streets. There are curfews and lockdowns, and death is in the air. But there is something different about this wave. Apart from the difference in the disease pattern (infectivity is higher and younger people are being affected), a larger proportion of the elite has been infected. In Mumbai, high-rises have been more affected than slums. The elite have been rudely exposed to the dysfunctionality of our healthcare system which the poor have endured for years. The secure world of the privileged has been exposed. Imbalance between demand and supply of healthcare facilities is not peculiar to India. But there is something in our social DNA that could be making it worse.
Categorising patients based on severity
•A time-tested, effective strategy to face the challenge of a sudden large load on the healthcare system is the concept of ‘triage’. This means that when there are a large number of people needing urgent care and there are limited resources, the victims are divided into multiple categories based on severity of disease. The most severe are treated first as any delay will cost lives. The rest are treated later as per their level of severity. This idea was first introduced by Napoleon’s military surgeons to treat battlefield injuries and showed immediate impact. It is now standard practice in many countries when treating mass casualties. It has also been used effectively during COVID-19.
•But triage is not a sterile, mechanical protocol insulated from its surroundings. Its wide acceptance and implementation are based on the powerful but complex principles of justice and solidarity. It is where the interests of everyone are put above the interest of an individual; where those who need care first are prioritised over those who can wait, irrespective of who they are. It works when there is social consensus on a level playing field.
•Right from the first wave, Mumbai has witnessed a rather unique effort by the Municipal Corporation to set up a single-window portal of helplines for hospital beds. For the first time, this includes both the public and private sector. There is, of course, an inherent bias in that the public beds are free but the private ones are paid though the charges are capped. A tiered system of observation, oxygen and ICU facilities is in place on paper. However, a few weeks ago, a rather exasperated Municipal Commissioner of Mumbai said that the system is under strain because people are insisting on private hospital beds.
•It would be unfair to fault a new Commissioner for a duality that has been cultivated over the years. I doubt whether many of us would easily use a public hospital today. After all, by design or habit, the sanitised world of private medicine is what the privileged have inhabited for years. Moreover, it is hard to remember any senior bureaucrat, politician or even doctor who has chosen to be treated in a public hospital in Mumbai for COVID-19. Even as the Municipal Commissioner was complaining, asymptomatic or mildly symptomatic people such as Sachin Tendulkar, Akshay Kumar and Rashmi Thackeray were admitted to large private hospitals as “abundant precaution”. There are many individuals admitted to private hospitals because they fear that they won’t get a bed if they need one suddenly.
•Serious triage doesn’t only prioritise the sickest over the less sick. It also discourages futile treatment for the very sick who are unlikely to benefit from the treatment. Thus, a 90-year-old who maybe otherwise bedridden could be refused admission or someone with an advanced untreatable cancer who develops COVID-19 may be put lower in priority . It’s the same principle of justice applied in the reverse. Executing triage in its truest sense is a big collective leap and needs a certain social sanction. It needs to be perceived to be fair and transparent. The person who gives up a bed does it with the understanding that as and when she really needs it, she will get it. Everyone falls in line towards a greater common good.
Challenges
•In an unequal world, however, the challenges to this idea are immense. In India, a social triage based on class, caste and other hierarchies is everyday practice. Also, whatever the severity of the crisis, it is hard to imagine a determined neutral state implementing a strict triage. Finally, given the current dominance of the private sector, especially in intensive care, triage has to involve state control over the private sector. But if there was ever an opportune moment in this nation’s history to muster courage to implement genuine triage, it is now.
📰 Another wave spells more nutrition loss
The inability of those already on the brink of subsistence to absorb a second economic shock cannot be overlooked
•The political and social handling of the COVID-19 pandemic have added to the persisting issues of food insecurity faced by millions in India even prior to the novel coronavirus pandemic India consistently has ranked poorly in all international rankings on hunger (ranking 102 among 117 countries in the Global Hunger Index 2019). With the second, more vigorous wave of COVID-19, the inability of those already on the brink of subsistence to absorb a second economic shock cannot be overlooked even as the current health crisis is creating havoc. Rural distress specifically needs closer examination and urgent policy attention.
Data collection, findings
•The Rapid Rural Community Response, or RCRC to COVID-19, a collective of over 60 non-governmental organisations has collected three rounds of data since the lockdown. The data provide crucial evidence of the nature and persistence of food and financial insecurity among the poor residing in rural areas.
•The third round conducted between December 2020-January 2021 has collected data from 11,766 households across 64 districts, in Assam, Bihar, Chhattisgarh, Gujarat, Jharkhand, Madhya Pradesh, Maharashtra, Odisha, Rajasthan, Telangana and Uttar Pradesh.
Cutting down on food
•The most recent data suggest a persistence of cutting down on food even nine months after the first lockdown, during the seeming “revival” period. While 40% of the sample cut down on food during the first lockdown, an alarming 25% reportedly continued to cut down on food during the most recent survey conducted between December and January 2021. Households reported cutting down on nutritious food — 80% cut down on milk, vegetables, pulses and oil (around 50% reported cutting down on pulses alone). Disaggregating the figure, we find that the poorer, socially marginalised Dalits, and those with lesser access to food security schemes (such as migrants) faced more severe food insecurity. Comparing similar households, we find households in Uttar Pradesh and Jharkhand were faring among the worst performing States. These reductions will undoubtedly further accelerate the impending effects on children’s nutrition, as highlighted in the National Family Health Survey or NFHS-V (2019-20) and the Global Food Policy Report, 2021.
•The loss in nutrition may have come as a consequence of people losing their jobs and/or being pushed into lower income brackets over time due to the nature and handling of the pandemic.
Reduction in incomes
•Pew Research Center has indicated that the middle class in India has shrunk by over 32 million households in the past year. We find an indication of a downward shift in incomes even among a much poorer sample of households. Our survey suggests an over 70% reported reduction in incomes post the pandemic, with many falling into significant precarity. While 55% of households recalled earning less than ₹5,000 per month prior to the pandemic, around 74% reported doing so in December 2020-January 2021. It is thus unsurprising that around 30% households were also seeking loans, and among them, at least half of them reported needing loans for food, all indicative of the debilitating food and financial insecurities that poor households continue to face.
Migrants on the margins
•The second wave of the pandemic comes on the back of an uneven recovery and persistence of crippling food and financial insecurity among the poorest households, especially migrants. Migrants who have travelled to cities only months ago are again travelling back to their villages. In our sample, 74% households had migrant members who had returned to the village during or after the lockdown (in mid-2020); 57% among them had gone back to the destination city by December-January, with 59% of those remaining also wanting to go back. It was the relatively disadvantaged who had not been able to find their way back to the cities. There was limited support for migrants even in existing social protection schemes such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). For example, among the poorest, households with migrants were more likely to seek work than those without (43% versus 32%), but less likely to get work (49% versus 59%) under the scheme.
•It is clear that households have not had a chance to rebuild, and with many completely exhausting their savings and facing massive debt, they are bound to be more severely hit than last year. In the face of such a threat, including high unemployment that is steadily rising again, the state must ensure immediate, sustained action.
Food security is a must
•The Government has promised to restart the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) with 5 kg of rice/wheat per person per month for the next two months. The government needs to provide similar support for stabler longer periods; expand the current offering to include nutritious foods like pulses; address issues faced in existing schemes such as MGNREGA (like delays in wages and rationing); and new schemes such as a potential urban employment scheme should be explored. Food security schemes such as ration provided to children through anganwadis, Public Distribution System and mid-day meal scheme in primary schools need to be ramped up systematically and urgently. For migrants stuck in cities without work, community kitchens (such as Amma canteens) are required. The most vulnerable will need more predictable and stable support than ever before.
