A man walks past a fallen tree on a street following heavy rains from Cyclone Tauktae in Mumbai. (Image: AFP)
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“When sorrows come, they come not single spies, but in battalions,” lamented Claudius in Shakespeare’s Hamlet.
As if the second wave of the pandemic and the spurt in black fungus disease which has hit COVID survivors weren’t bad enough, Cyclone Tauktae, which has intensified into “very severe”, is afflicting the western coast of India. At least 1,00,000 people have been evacuated from dangerous areas in Gujarat. The storm is further expected to intensify in the next 24 hours adding to losses and delaying the vaccination drive. Read more in our live blog here.
Nationally, the vaccination drive continues to be the biggest story. Last week, the government announced that it will procure two billion doses of COVID vaccines between August and December, enough to inoculate all adult Indians by the end of the year. It’s a matter for great cheer, but the announcement has raised a lot of questions as well.
Around 700 million of the two billion doses are earmarked from vaccines that are still in various clinical trial and development stages such as the Novavax shot, Bharat Biotech’s nasal vaccine, and Zydus Cadila’s DNA vaccine. It is also making certain stretch assumptions – for e.g., expecting Serum Institute to produce 150 million doses a month; the company has said its capacity will become 100 million doses per month by July.
Naturally, scepticism abounds.
“I take the projections with a grain of salt. If you remember, last year, we were told that, by December, Serum Institute would produce 100 million doses of vaccine and Bharat Biotech in tens of millions of doses,” Dr Gagandeep Kang, a leading virologist, told us in this interview. There is also insufficient data to show the efficacy of Bharat Biotech's nasal vaccine and Zydus Cadila's DNA vaccine, she added.
Leave aside these doubts, how actively is the government monitoring and helping the vaccine producers help them scale up? Has it given money in advance that they would need? Has it placed firm orders that can be used for planning purposes and manufacturing scheduling? These are questions our columnist Prosenjit Datta has posed. You can read his piece here.
The other part to the vaccination story is who pays the bill for the mass inoculation at a time when government finances are already straining under the burden of heavy borrowing.
Bond yields are high and will only increase if they borrow more. If states cut back on spending elsewhere, especially capital expenditure, it can derail the recovery. The Centre has advised the states to sell assets, the Tamil Nadu finance minister told Bloomberg newswire. But that’s easier said than done as we have seen in the case of the government’s missed disinvestment targets year after year.
As it is, government debt levels are already high – at 90 percent of GDP, the highest similarly rated countries, according to Fitch – and will add to the economic risks of the pandemic.
Modern Monetary theory offers a way out. How the British financed World War 1 could provide clues on how to fund the war against the pandemic in India, writes Sashi Sivramkrishna here.
Stay safe and check out these reports from our independent equity research team:
Safari – Why the coming weak phase is the best time to add this stock
Larsen & Toubro sees COVID second wave as a blip, not a derailment
Dr Reddy’s: COVID opportunity gets wings
Cipla — While COVID scope continues, watch out for FY23
A strong show by Escorts; accumulate during the soft patch
What else are we reading?
Is this the right time to board GoAir?
UPL: Upbeat revenue outlook eclipses corporate governance concerns
Exports target of $400 billion tough to achieve
Foxconn the carmaker? Disruption in the era of electric vehicles (Republished from the FT)
Our chartists’ technical calls for the day (Please note these calls are published before the markets open on trading days): Tata Chemicals, ICICI General Insurance, Federal Bank and NMDC.