📰 We mean business, SC says on Delhi’s oxygen quota
It warns of coercive action if govt fails to act
•The Supreme Court on Friday underlined the obligation of the Union government to comply with the order to supply 700 MT of oxygen to Delhi “every day”, saying “we mean business”.
•A Bench of Justices D.Y. Chandrachud and M.R. Shah warned the Centre of forcing the court into taking “coercive action” against it by reneging on its promise in court to supply 700 MT of oxygen to Delhi, which is battling a devastating second wave of COVID-19.
•The court’s comments came soon after senior advocate Rahul Mehra submitted that Delhi had received 86 MT of oxygen till 9 a.m. and another 16 MT was in transit.
•The court referred to a tabulated chart detailing the Centre’s “comprehensive plan” for the allocation, supply and distribution of oxygen to the national capital.
New feature will also prevent misuse of services offered
•In order to minimise errors and inconvenience caused to citizens registering for COVID vaccination, the CoWIN system will introduce a new feature — a four-digit security code — in its platform from May 8, the Health Ministry has said.
•“It has been noticed in some instances that citizens who booked their appointment for COVID vaccination through the CoWIN portal did not actually go for vaccination on the scheduled date but received a notification through SMS that a vaccine dose has been administered to them. Upon examination, it has been found to occur largely on account of the vaccinator wrongly marking the citizen as vaccinated, an instance of a data entry error by the vaccinator,” noted the Ministry.
•The added feature now is to minimise these errors. The Ministry said that after verification if the beneficiary has been found as eligible, before administering the vaccine dose, the verifier/vaccinator will ask her the four-digit code and then enter it in the CoWIN system to correctly record the vaccination status.
•This new feature will be applicable only for citizens who book online for a vaccination slot.
•The four-digit code will be printed in the appointment acknowledgement slip and will not be known to the vaccinator.
•The code will also be in the confirmation SMS sent to the beneficiary after successful booking of appointment. The appointment acknowledgement slip can also be saved and shown from the mobile.
•“This will ensure that for citizens who have booked an online appointment, the data entries regarding vaccination status of a citizen, are recorded correctly and only for those who book online appointment and avail the services at the centre where they have booked the appointment,” said the Ministry.
•It added that this will also reduce the possibilities of impersonation and wrongful use of flexibilities provided in CoWIN for facilitating vaccination coverage.
Advisory issued
•The Ministry has also issued an advisory for those coming in for vaccination. The Ministry has noted that citizens must carry a copy (digital or physical) of their appointment slip and/or the registered mobile phone with appointment confirmation SMS, so that the security code can be furnished for easy completion of vaccination recording process.
•It is also advised that the security code is furnished to the verifier/vaccinator before the vaccine dose is administered.
•“This is important as the digital certificate would be generated after the vaccine dose administration,” said the Ministry.
•The Ministry noted that citizens should get a confirmation SMS after the process.
•“The confirmation SMS indicates that the vaccination process has been completed successfully and the digital certificate has been generated. If one does not get the confirmation SMS, one should get in touch with the vaccinator/ vaccination centre in-charge,” it said.
📰 India’s sovereign rating to remain unchanged despite pandemic impact: S&P
Health crisis may lower growth, it says
•India’s sovereign rating will remain unchanged at the current level of BBB- for the next two years despite the potential adverse impact of surging pandemic on its economy, said a top official at S&P Global Ratings on Friday.
•However, the country would witness a slightly faster pace of growth in the next couple of years, effectively supporting the sovereign rating, he said.
•“India’s sovereign rating remains stable,” said Andrew Wood, director, Asia Pacific Sovereign Ratings, S&P Global Ratings.
•“We do not expect a change in rating level over the next two years. Currently that remains the case.”
•“Of course, there are going to be some near-term ramifications for India’s economy stemming from the severe second wave of COVID-19 and that may peep through into our sovereign-credit metrics,” he said.
•Maintaining India’s real GDP growth forecast at 11% for this fiscal, Mr. Wood said, “It is a baseline scenario with some downside risk. But, if we do see a number creeping lower, most likely it will not go too far in our current downside scenario.”
•He said India in all likelihood will have positive growth this fiscal year but there is potential for a lower rate of growth owing to the current health crisis.
•However, he said, “We would more likely see a slightly faster pace of growth in the ensuing two years.”
•Addressing a webinar on the topic ‘What a drawn out second COVID wave means for India,’ organised by S&P Global Ratings Mr. Wood said the second wave would not have any major impact on the government’s fiscal position in the case of a moderate downside scenario.
•There could be upside pressure on fiscal deficit as revenue generation could be weaker but despite this, the government’s debt stock would remain roughly stable at just above 90% of the GDP.
•“In the severe scenario, there could be more additional fiscal spending from the government and revenue growth would be weaker. This would mean that the debt stock would stabilise in the next fiscal,” he said.
•Earlier, S&P, in a report, stated that India’s nascent economic recovery through March solidified government revenue. But the rapidly developing health crisis could derail this progress.
•Record case numbers, limited capacity in the healthcare system, and localised lockdowns aimed at curtailing the spread of the virus would likely take a toll on household consumption and retail activity.
•“Should the outbreak worsen over the coming months, or if case numbers plateau at a very high level, this would elevate risks to India’s economic and fiscal recovery. This assumes that the health system faces prolonged capacity constraints,” the report said.
•The second wave should not hit the economy as hard as the first wave did in the first quarter of fiscal 2021, it said.
•Should there would be no nation wide lockdown, the impact on the economy would be limited compared with the effects of lockdowns one year ago, it added.
•“However, it is notable that the pandemic is more than a year old and is only getting stronger. The severity of the crisis is challenging the country’s fiscal settings, which were already weak before COVID struck,” according to the S&P Global report.
•Over the next two to three years, fast nominal GDP growth would be critical in arresting the rise of the government debt to GDP ratio. This ratio may only stabilise the following fiscal year in the severe downside scenario, it said.
•“Our moderate scenario suggests a hit to GDP of about 1.2 percentage points,” according to the report. “This means full-year growth of 9.8% for fiscal 2022. This compares with our baseline forecast of 11% growth for the period, set in March 2021. This would see a recovery taking hold again later in the year,” the report said.
•In the severe scenario, the hit is 2.8 percentage points, with growth of 8.2%, it added.
📰 ‘Indian offshore model will dominate IT scene for a decade’
Firms in India are ‘pandemic winners’; prices trend lower
•IT markets are picking up to such a degree that both the U.S. and Europe are running out of critical skills, and with this, offshore and Indian alternatives are increasingly becoming attractive for tech buyers, analysts said.
•In addition to the skills shortage, the pandemic-induced work-from-home has further raised the openness of global tech buyers to working in a distributed environment, away from onshore (or the client’s location), Peter Bendor-Samuel, CEO, Everest Group, said.
•“These factors are working together and have gone a long way to offset the pre-Covid trend to onshore. The effects of the pandemic may go away but the talent shortage looks to be increasing and is likely to stay for several years... Be it offshoring or onshoring, a robust market is floating all boats and they are likely to sail steady for the next few years.”
•Typically, offshore accounts for 70-80% of a project while onshore is in the 20-30% range. In the COVID-19 era, markets are seeing a clear 50% reduction in onshore and 5-15% rise in offshore share, said Phil Fersht, founder and CEO, HfS Research. The rise in offshore share is smaller in existing projects while new ones come with a higher ratio.
•“For all IT work conducted remotely, it makes perfect sense to run it from India and the Indian model will dominate the IT service scene for at least another decade,” he added.
•Offshore providers have ended up being ‘pandemic winners’, seeing quantum growth in revenues and substantial decline in operational cost after the WFH trend kicked in, said Siddharth Pai, founder, Siana Capital.
•On the impact this has had on pricing, Mr. Fersht said, “We’re now seeing some of the most aggressive pricing ever. Several deals are priced as low as $4-6 per hour for IT and business process work.”
📰 Rent issues as an ignored COVID stress point
The second wave has amplified the issue of rent which does not draw much attention as food and income support do
•As State governments have begun implementing weekend curfews and lockdown-like conditions amid the second wave of COVID, there is another issue that is emerging — rent crises within informal rental housing markets. For example, domestic workers in Jaipur, Rajasthan, have begun reporting to the Rajasthan Mahila Kamgar Union (RMKU) that landlords have only one line: “Pichli baar maaf kar diya tha, iss baar nahi karenge (The landlords say they will not be waiving any rent this time).”
Trauma returns
•Meanwhile, reports of loss of livelihoods, in an eerie echo of 2020, have begun. In a crisis, the issue of rent does not get as much attention as food and income support do. Yet, the findings from a survey of 500 domestic workers in Jaipur by the RMKU and the Indian Institute for Human Settlements (IIHS) showed that rent formed 40% of their average expenses in the first five weeks of the lockdown in 2020, was a majority component of debt post the lockdowns, and was a key component of the vulnerability of urban workers. This is not just true of domestic workers. Reports by the Stranded Workers Action Network showed that fear of rent payments was one of the main reasons cited by migrants in their decision to leave cities and walk along highways.
•It is imperative that we learn from the lessons of last year and protect the rental housing of informal workers early, effectively, and expansively. How should this be done? In February, we learnt crucial lessons from follow-up interviews with 76 domestic workers in Jaipur to see what had happened to rental housing through last year, and what lessons it offers for better protections this year.
Unenforceable moratoria
•On March 29, 2020, the Union Ministry of Home Affairs in an order said, “Where ever the workers, including the migrants, are living in rented accommodation, the landlords of those properties shall not demand payment of rent for the period of one month.” It was an order that largely failed. It was vague (was the rent to be waived or just deferred?); offered no relief to landlords (many of whom rely on rent for their own sustenance, not unlike their tenants); and unenforceable in a market with no written rent agreements. Further, there was no apparatus to monitor the enforcement of this order. In most cases, it was the tenants who had to negotiate with their landlords and request for leniency. When one of our interviewees, Meena (name changed) cited the state announcement to her landlord, she was told, “Yeh sab sunne ka hai, koi maaf nahi karega (All of this is impractical, nobody will actually waive the rent).”
•Some landlords waived off rent for a month or two while others agreed to defer the rent. A few made no compromises and expected the rent to be paid on time, sometimes employing threats and coercion. Interviews show that domestic workers had to make difficult trade-offs, redirecting money reserved for necessary expenses such as food, school fees, and life savings to be able to pay rent and retain a roof over their heads. With pending rent and school fees worsening with no money coming in, many domestic workers had to borrow from informal moneylenders. Even in cases where the rent was deferred, it led to a piling up of debts for domestic workers who took more than a few months to get even a part of their jobs back. Some domestic workers borrowed from their employers, on the condition of paying it off with their work over the next few months, which meant a further paucity in income.
•Rent is particularly pivotal for workers who do not consider themselves migrants. For all the domestic workers we interviewed, returning to their villages was not an option. This was both because of their investments in decades of life in the city where, for many, their children were born, as well as the lack of jobs in the village, no skills for agricultural employment, and the absence of social ties. As Mangal (name changed) said, “Bachche yaha padayi karte hain, hum bhi shuru se yahin hai toh jaise ab gaanv me kheti-baari ka kaam hai kuch nahi aata hai, toh me wahaan baske karungi kya? (The children are studying here, we have also been living here since the start, we do not even know any farm work, so what will we do after settling there?)” The only condition that renders such workers as “migrant” is their exclusion from the State programmes because they have not been able to get, for example, local ration cards despite years of trying. As Sindhu (name changed) narrates, “Hum toh na Bangal ka ho gaya naa Rajasthan ka ho gaya, hum toh aatankwaadi ho gaye naa? (We are neither of Bengal, or of Rajasthan, are we terrorists?”) Rent anchors the lives workers have built; it must be seen as a key part of the urban social safety net, as critical as food and wage.
Some solutions
•First, a moratorium should be announced with a clearer enforcement mechanism and a clear distinction between deferment and rent waivers. Working with worker organisations and unions could greatly aid enforcement. Landlords should be offered means to access partial compensation for lost rent from the state shifting the onus onto them rather than on workers. Second, cash transfers being conceptualised by many State governments must treat rent on a par with food and income support. The amount of cash transfer for rent support can be estimated on the basis of the rental market conditions (₹2,500-₹3,000 being the average monthly rent among our respondents in Jaipur). Third, States can also aid workers through limited waivers on utility expenses. For example, the electricity bills and penalties charged on non-payment were quite a burden for domestic workers. Unlike rent, there was no negotiation possible for utility payments, with some workers reporting the need to borrow from landlords to pay electricity bills.
•The second wave of COVID-19 has shown us the consequences of not preparing in advance. We cannot afford to not think ahead on the income and rent shocks that will follow this second wave as they did during the first wave. In doing so, urban safety nets must bring together food, income and rent so that no person should be forced to make an impossible choice between roti and makaan.
📰 The fig leaf of patent protection has to drop
The U.S.-supported patent waiver in the COVID fight has the potential to bring in much-needed global health equity
•The decision of the President of the United States, Joe Biden, to support the India-South Africa proposal, seeking a waiver of patent protection for technologies needed to combat and contain COVID-19, comes as a shot in the arm for global health. The proposal that was placed before the World Trade Organisation (WTO) had been facing resistance from several high income countries including the U.S. administration. A change in the American position supporting a temporary waiver could act as a catalyst for building consensus in favour of that proposal when it comes up for fresh consideration at the WTO in June. However, the path ahead is not clear. While France and Russia have declared support, Germany has voiced its opposition.
Predictable responses
•Response to the proposal was divided during earlier debates at the WTO. While many low and middle income countries supported it, resistance came from the U.S., the United Kingdom, the European Union, Switzerland, Australia and Japan. A strange addition to this group was Norway, which usually supports initiatives that promote global health equity. On this occasion, it chose to shield patent rights. Since the WTO operates on consensus rather than by voting, the proposal did not advance despite drawing support of over 60 countries.
•Predictably, the pharmaceutical industry fiercely opposed it and vigorously lobbied many governments. Right-wing political groups in the high income countries sided with the industry. Microsoft co-founder and billionaire Bill Gates was strident in his opposition to patent waivers for vaccines, justifiably drawing ire from the public health community for a stance that was at great variance from his projected image as a messiah of global health. It appeared that patent rights would be doggedly defended even in the face of a devastating pandemic.
Hollow reasons
•Many specious reasons were offered for such a defence. It was argued that the capacity for producing vaccines of assured quality and safety was limited to some laboratories and that it would be hazardous to permit manufacturers in low and middle income countries to play with technologies they cannot handle. This smacks of hypocrisy when pharmaceutical manufacturers have no reservations about contracting industries in those countries to manufacture their patent-protected vaccines for the global market. The low labour costs in those countries are obviously so attractive that confidence in the quality and the safety of their products is high, so long as patents and profits are protected.
•This amazing duplicity has been seen for years when multinational firms have subcontracted manufacture of patented products to industries with low production costs in developing countries. This has been true of pharmaceutical products, as it has been of branded consumer products and luxury goods. This fig leaf has to drop, at least in a pandemic.
•The counter to patent waiver is an offer to license manufacturers in developing countries, while retaining patent rights. This restricts the opportunity for production to a chosen few. The terms of those agreements are opaque and offer no assurance of equity in access to the products at affordable prices, either to the country of manufacture or to other developing countries.
•It was also stated that developing countries could be supplied vaccines through the COVAX facility, set up by several international agencies and donors. While well intended, it has fallen far short of promised delivery. Some U.S. States have received more vaccines than the entire Africa has from COVAX. The trickle down theory does not work well in the global vaccine supply, just like its dubious application in economics.
•Critics of a patent waiver say there is no evidence that extra capacity exists for producing vaccines outside of firms undertaking them now. Even before the change in the U.S.’s position, manufacturers from many countries expressed their readiness and avidly sought opportunities to produce the approved vaccines. They included industries in Canada and South Korea, suggesting that capable manufacturers in high income countries too are ready to avail of patent waivers but are not being allowed to enter a restricted circle. The World Health Organization’s mRNA vaccine technology transfer hub has already drawn interest from over 50 firms.
•Instead of arguing that capacity is limited, should not high income countries and other donors be supporting the growth of more capacity to meet the current and likely future pandemics? They should learn from the manner in which India built up capacity and gained a reputation as a respected global pharmacy by moving from product patenting to process patenting between 1970 and 2005.
China line, safeguards
•Patent waivers are also dismissed as useless on the grounds that the time taken for their utilisation by new firms will be too long to help combat the present pandemic. Who can set the end date for this pandemic, when many countries have low vaccination rates and variants are gleefully emerging from unprotected populations? If the world boasts of the speed with which previously little known companies produced vaccines in record time in 2020, why not support others to develop that capacity through technology transfer? Efficacy and safety of their products can be assessed by credible regulatory agencies and the World Health Organization. Patent waivers will benefit by increasing access not just to vaccines but also to essential drugs and diagnostics. Surely, that will not take much time.
•An argument put forth by multinational pharmaceutical firms is that a breach in the patent barricade will allow China to steal their technologies, now and in the future. The original genomic sequence was openly shared by China, which gave these firms a head start in developing vaccines. Much of the foundational science that built the path for vaccine production came from public-funded universities and research institutes. Further, what use is it to hold on to patents when global health and the global economy are devastated? Who will buy their precious products then?
•The perennial argument, offered for defending patent protection, is that innovation and investment by industry need to be financially rewarded to incentivise them to develop new products. Even if compulsory licences are issued bypassing patent restrictions, royalties are paid to the original innovators and patent holders. They will continue to gain revenue, though not super profits. Pfizer’s vaccine generated $3.5 billion in revenue in the first quarter of 2021, while mostly reaching the arms of the world’s rich. It expects $15 billion sales this year. Moderna says it expects sales of $18.4 billion in 2021. The incentive to protect profits is very strong indeed.
Building on Biden’s gesture
•The World Trade Organization resolves debates by consensus and not by voting. The process may drag on, despite U.S. intervention. If Mr. Biden succeeds in driving consensus to provide a global thrust to combat a global threat, he will match Franklin D. Roosevelt’s leadership in the Second World War. He does not have such an alliance in place now.
•So, developing countries must take heart from his gesture and start issuing compulsory licences. The Doha declaration on TRIPS flexibilities permits their use in a public health emergency. National governments must be trusted to promote credible companies and not permit fly-by-night operators. High-income countries and multilateral agencies should provide financial and technical support to enable expansion of global production capacity. That will reflect both ennobling altruism and enlightened self-interest.
