Covid’s second blow

India managed its first wave of Covid-19 reasonably well due to the Centre’s timely actions by the central government.

Unlocking the economy since June 2020 was calibrated systematically. The revival of the economy was rapid and ‘V’-shaped. By the third quarter of FY21, the confidence level was high partly due to the availability of anti-Covid vaccines and more importantly due to recovery of economic activities to the pre-Covid level.

However, this also led to complacency leading to reckless social gatherings, including Kumbh Mela, farmers’ agitation, and election campaigns which caused the second wave to spread like wild-fire.

The daily Covid-positive cases surpassed 4 lakh at the pan-India level — more than four times the peak of the first wave - overwhelming the available medical facilities.

While supply constraints have hit the vaccination drive, efforts are being made to import single-dose Sputnik from Russia. The government has also diverted oxygen from industrial use to medical use to tackle medical emergencies. India’s medical facility is not only inadequate but on the verge of collapsing. Foreign nations have stepped up aid to India, thanks to the the goodwill it earned by supplying vaccines around the world.

Discretion was given to States to take appropriate action to combat the second wave. Decision-making was delayed in many States leading to a crisis. Many States have imposed lockdown in some form or the other. The only exception is Odisha, where lockdown has been imposed proactively.

The lockdown in the second wave is not as strict as in the first wave. States’ ability to deal with this pandemic has also come under question.

Passing the buck from the States to the Centre would be of little help. As resources are limited, their best use needs to be done keeping in view the critical cases. This is not the time to politicize the distribution of medicine, oxygen, and other medical equipment. Unfortunately, the Supreme Court has to set up a Task Force for the distribution of Oxygen among States. How much executive function can be done by the judiciary?

Following lockdown, there are early signs of Covid-curve bending in some States. Assuming the second wave peaked in May 2021, its impact will continue for the first two-quarters of FY22. There are already warnings of an impending third wave.

Contact-intensive formal and informal sectors have been badly hit. Before the immunisation of at least 50 per cent of the population, if the third wave occurs, the already-stretched healthcare system cannot manage even the critical cases beyond the current level.

Vacinations need to be expedited and the States cannot shirk their responsibility as regarding logistics necessary to distribute vaccines among centres administering the jabs. Production facilities should be also be ramped up to enhance supplies.

As many people do not know how to register on the co-win portal, the government has to allow a walk-in facility for them. States must have dedicated websites to indicate vaccine availability to avoid crowding at vaccination centres.

It is too early to estimate the impact of the second wave on GDP. States cannot afford to relax lockdown prematurely as the third wave is lurking around the corner.

From an unprecedented contraction of about 8 per cent in FY21, the economy may bounce back in FY22, but the double-digit recovery is unlikely. Many forecasters have pruned their growth projections to 8-9% in FY22 due to the staggered lockdowns. Hopefully, India can avert the third wave by mass vaccination on a war footing.

The writer is former Principal Advisor and Head of the Monetary Policy Department of RBI.

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