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June 22, 2021

Quickonomics: Moving the needle

Only rapid vaccination can fast-forward and broad-base economic recovery

India’s second Covid-19 wave is finally ebbing, with weekly average cases declining to ~60,000. That’s still high, but a huge relief nevertheless, when considering that cases had risen to 4.14 lakh just a month back.

 

With this, states have started relaxing lockdowns – with caution. Also, unlike in 2020, when restrictions were swiftly lifted as cases started to decline, curbs have been prolonged this year with state governments wary.

 

The Indian Council of Medical Research (ICMR) recently1 recommended three conditions before opening up the districts: below 5% positivity rate, 70% of vaccination coverage, and mandatory social distancing.

 

Given the healthcare challenges posed by the fierce second wave of Covid-19 infections and warnings about an impending third wave, restrictions in some form are expected to continue at least till a larger proportion of the population is vaccinated. Overall, economic activity will be sluggish till then as contact-based services will only partially recover.

 

The vaccination rate in India has been worryingly slow due to lack of supplies. From a peak of 3.5 million doses average per day in mid-April, India’s vaccination rate fell to 1.3 million per day in the third week of May, and rebounded to 3.2 million per day in the week ended June 20. With the new vaccination policy2 kicking in, June 21 saw a record 8.6 million jabs. It is important that this run-rate continues for the rest of 2021.

 

So far, just 3.8% of the total population has been fully vaccinated and 17.2% has received one jab. The government aims to fully vaccinate 100% of the adult population by December (against 5.5% of the adult population fully vaccinated so far). That’s tantamount to the required run-rate of ~8 million doses per daybetween now and end-December, or 3x the pace seen so far.

 

1https://www.onmanorama.com/news/india/2021/06/02/coronavirus-wave-india-lockdown-curbs.html
2As per the new vaccination policy that came into effect on June 21, the Centre will procure 75% of the vaccine stock from the open market and distribute it to states.States can then administer it free of charge to all those who are 18+ years of age. The balance 25% is to be distributed to private hospitals and vaccination centres,which can administer the jabs for a fee.