A thread in response to different views expressed against my tweets and articles on Covid #vaccines. Many were abuses; I ignore them. I try to take the reasonable questions and try to answer them here. One question and one answer in each tweet below. Its a long thread, btw! 1/n
Q1) Why should India give vaccines free? Who gives vaccines free?
A1) Most countries are giving Covid vaccines free to their citizens. I shall give examples of some major countries, including United States, United Kingdom, China, Germany and France. See screen shots below. 2/n
...A1...) What about United States? It is free. 3/n
...A1...) What about United Kingdom? It is free. 4/n
...A1..) What about Germany? It is free. 5/n
...A1...) What about France? It is free. 6/n
...A1...) What about China? It is free. 7/n
Q2) Why should India give vaccines free? There is nothing wrong in charging.
A2) There are two or three problems with this argument. First, there is already considerable vaccine hesitancy in India. Charging Rs 400-600/dose (*2 for 2 doses) will only reinforce hesitancy. 8/n
...A2...) Secondly, States are being asked to purchase vaccines from producers. Many States have, rightly so, decided to give vaccines free. This is a major financial burden for States. Vaccinating 100 crore people twice @ Rs 400/dose costs Rs 80,000 crore for all States. 9/n
...A2...) Thirdly, If States are unable to finance this and charge people for vaccines, most of them simply cannot afford it. An average Indian family with 3 adults will have to pay Rs 2400 for two doses, which is a major part of their monthly income. 10/n
...A2...) Vaccines are global public goods and it is the constitutional responsibility of enlightened welfare states to provide them free to everyone. Right to health flows directly from Article 21 of the Indian Constitution, and right to free vaccines is a sub-set of it. 11/n
Q3) Should not vaccine producers like Serum Institute make a profit? What is wrong with it?
A3) It is wrong to assume that SII makes a loss on its vaccines at Rs 150/dose. Adar Poonawallah himself said in an NDTV interview that SII currently makes a normal profit per dose. 12/n
...A3...) See transcript of the Poonawallah interview below. He said that while they make normal profits, they are looking to make "super profits" in the coming months. Thus, he said in another ANI interview, that his preferred price for Covishield is Rs 1000/dose. 13/n
...A3...) Today's announcement by the SII to set price at Rs 400-600/dose is the first phase of price rise. The next phase will see another price rise taking prices closer to Rs 1000/dose. Central government can intervene & control prices, but it is not doing so to aid SII. 14/n
Q4) Is not the centre's 50% quota of vaccines free for all?
A4) Yes, but only for the first 30 crore coverage out of the 130 crore population, which is essentially those >45 years of age. For the rest, constituting the bulk of the population, vaccination is now charged for. 15/n
Q5) Is not the present setting of prices at Rs 150/dose for centre, Rs 400/dose for States and Rs 600/dose for private hospitals a normal market strategy of a private firm?
A5) Yes, but not for a firm that produces a global public good in the midst of a pandemic. 16/n
...A5...) The problem is that the centre has managed to insulate itself from any price rise and the attendant budget burdens, while it has passed on a higher budget burden to the States. It is ethically unfair in a federal democracy with shared developmental goals. 17/n
...A5...) States are already bearing much of the tasks on the health front to address the pandemic. States cannot bear more burdens. Rs 80,000 crore can be easily allocated by the centre for the vaccines, which can then be given free to all. What is the PM Cares Fund for? 18/n
...A5...) Finally, the three-price system as today's is administratively difficult to manage. It can lead to chaos with various States & private hospitals vying for a fixed quantity of vaccines. Rationing will lead to avoidable competition and wastage of scarce resources. 19/n
In sum, the best and most efficient strategy would have been a free supply of vaccines by the centre to States, and the centre paying a regulated price (covering normal profits) to vaccine producers. With universal access, this was the most equitable policy to follow. n/n
A quick thread on today's announcement of the Government of India (GoI) to open up Covid vaccination to those above 18 years of age from May 1st. The fine print is dangerous. The decision comes with a considerable liberalisation of the pricing of vaccines. 1/n ...
The GoI has essentially given freedom to the vaccine makers to sell 50% of their vaccines to the States "in the open market". At what price? This press note says: "private vaccination providers shall transparently declare their self-set vaccination price." 2/n ...
This manufacturer-determined price will most probably be the base price from which States will have to bid to procure vaccines. This is just what the private vaccine firms were asking the GoI to do. It allows them to make super profits in the midst of the pandemic. 3/n ...
Phew! The last day of “Project Evade”. The govt made 3 things clear: one, it doesn’t intend to spend for farmers and workers; two, instead of borrowing/monetising, it prefers to disinvest & raise money; and three, it sees the crisis as an opportunity to deepen reforms. 1/n […]
World over, out of about $7.5 trillion announced by different govts, about $3 trillion (40%) are “spending and revenue measures” and about $4.5 trillion (60%) are “loans, equity injections and guarantees”. India is a major exception to this global trend. 2/n [...]
If we take a very liberal view, not more than Rs 1.2 lakh crore out of Rs 20 lakh crore in India is direct spending. All the rest are measures to increase liquidity or bank credit. Even if we include some other indirect steps, the total won’t exceed Rs 1.5 lakh crore. 3/n [...]
Today’s Part 4 of ‘Project Evade” by the FM was classic. It was salutary, because it required enormous amounts of guts and audacity to face the people of India on live TV and dish out such extraordinary nonsense, at a time when 100s of people are dying of hunger. 1/n […]
FM started by claiming that govt will link all industrial land banks with GIS tags! Wow. Then she said industrial parks will be ranked by 2020-21. Hello! Ranking of industrial parks was done in 2018 itself, isn’t it? (bit.ly/3g4utcC) Sorry, no questions asked. 2/n […]
Then came the announcements. She said commercial mining is being introduced outside the public sector. One wonders why it is said now. This was already passed as a law in the Parliament in March 2020 itself: the Mineral Laws (Amendment) Bill. See bit.ly/2X31w7X. 3/n
<thread> Today’s presser of the FM was on agriculture. Farmers are struggling due to no markets & lower prices. They expected a cash handout (increase of payment or front-loading 2nd installment of PM-Kisan) or higher MSP or a debt relief. But the FM had other plans! 1/n […]
FM first spoke of a Rs 1 lakh crore financing facility for funding aggregators & FPOs to improve farm-gate infrastructure. This is most likely a loan-based scheme through banks. We already have “Operation Greens” for this in TOP crops. No budget outgo likely. Details awaited. 2/n
FM then set aside Rs 10,000 crore for micro food enterprise clusters. This again is already represented under multiple schemes/heads in the budget. Allocation may slightly rise after today. Still, a major part of this is likely to be loans. Small, but welcome. 3/n […]
Today's Part 2 of "Project Evade" by the FM was truly a damp squib. The first 40 minutes was just a dry narration of claims. The dates here were carefully selected where the public has few ways of independently cross-verifying the claims. 1/n
Again, the extent of fiscal obligation was kept bare minimum with the banking system being used to the hilt to make big claims. Let us, in this thread, examine the claims and announcements of today. 2/n
The FM said that loans worth Rs 86,600 crore were provided to agriculture in March-April 2020. Assuming that 25% of agril loans are given in March-April (2007 estimates), Rs 3 lakh crore was supplied in March-April 2019. 3/n
Today's so-called "package" announced by the FM was Part 1 of "Project Evade". It is clear that the govt has no intention to spend beyond a basic minimum on the fiscal side. For the rest, it plans to rely on the deposit resources of banks. 1/n
Not to say that debt relief measures & liquidity are not important, but they should not become a substitute for fiscal measures. The govt's advisor was saying, quoting Deng Xiaoping(!), that as long as the cat catches the mice, it doesn't matter. It matters. 2/n
More debt creation without regard for debt sustainability or the financial health of banks may turn out to be counterproductive in the medium-term. Also, trying to inject more credit when demand is at its nadir may not turn anything around on the ground 3/n ...