By Rudra Sen

The Indian summer witnessed catastrophic scenes meted out by the second wave of the pandemic. The world watched as India struggled with a lack of hospital beds, oxygen supply and stock of essential medicines. Mismanagement between various state agencies was quite evident as daily cases soared over 400,000 and the recorded death toll went above 4000. Yet in less than three months there is a sense of normalcy in the country. 

Such a scenario has arisen amidst a period when India faces the challenge of creating a balance between saving lives and bettering livelihood. Lockdown measures in response to a substantial increase in cases had resulted in the temporary disruption of economic activity. India’s economy contracted by 7.3% in the fiscal year 2020-21 during the first wave. But the impact of the second wave is expected to be softer as there were localised lockdowns instead of a nationwide one.

As cases in the past couple of months have started to drop, many states in India have started to ease restrictions by allowing shopping complexes, restaurants, gyms and other businesses to reopen. Although experts have cautioned against removing all such restrictions, with an estimated 32 million people being pushed out of the middle class and 75 million people being pushed into poverty (those earning $2 or less per day), policies prioritising economic recovery have prevailed.

Furthermore, inequality within the country is expected to increase as former central bank governor, Subbarao expects that India will have a ‘k-shaped’ recovery instead of an anticipated ‘V-shape’. A k-shaped recovery occurs when different segments of an economy recover at different rates. It indicates that one segment of the economy is growing, whilst the other continues to stagnate. A k-shaped recovery will hurt the nation’s long-term economic prospects as consumption is likely to decrease as well. Meanwhile, India’s top 10% account for 25-30% of its consumption and would have been able to save higher during the pandemic. This top 10%  might give a one-time boost to demand which will ultimately be these very savings. Moreover, if COVID-19 increases inequality in income, it could hurt productivity in the long run too. 

In times of such uncertainty, it becomes imperative that the government learns from its shortcomings in the first and second waves to avoid another one. While the new strains of coronavirus were blamed to cause the sudden spike of cases in India, lack of COVID appropriate behaviour was widely highlighted as a potential cause. A steep decrease in cases from September 2020 ensued the public rhetoric being that the pandemic was on the verge of its end. Prime Minister Narendra Modi’s declaration in January this year that India had successfully controlled COVID-19 reaffirmed this narrative. Several instances of complete disregard for social distancing and face-covering norms at large scales followed and were reported by news outlets before the onset of the second wave. For example, thousands of spectators were allowed to watch the India-England test series and election campaigns featuring massive gatherings were held with great splendour. Thus, India’s second wave arrived when its society was mixing around and the movement of people was unrestricted. Udwadia, a clinical researcher, told Nature that the second wave made the last one seem like a “ripple in a bathtub”. 

During the second wave, hospitals were overflowing with many patients being denied admission. India was not prepared to deal with such a degree of health emergency even after the experience of 2020. This eventually revealed the fragility and disunity of coordination in India’s federal structure of governance as the central and some state governments locked horns over issues like oxygen and vaccine supply. The international community stepped up by offering aid after alarming images and news stories emerged reflecting India’s dire oxygen and medical supply deficit surfaced. For instance, the United Kingdom sent 295 ventilators and 495 oxygen concentrators and three oxygen generation units. 

Consequently, a significant number of publications both international and national including The Lancet held that the Indian government faltered in its role of controlling the pandemic. Whilst the government has not categorically accepted such accusations, Health Minister Dr Harsh Vardhan resigned recently ahead of a major reshuffle in the cabinet of ministers, allegedly over his role in the mismanagement of COVID-19.

A report titled ‘COVID-19: The Race to Finishing Line’ by SBI Research predicts that India is most likely going to suffer another wave of coronavirus by mid-August and its peak arriving in September. This new wave is approximated to be 1.7 times the peak cases during the second wave (projections are based on historical trends). Furthermore, India has only been able to fully vaccinate 4.7% of its population out of 1.3 billion people as of 5th July 2021, making it more vulnerable to a predicted third wave. In addition to minimising a third wave of the virus, an increase in vaccination rates will also help in facilitating consumer confidence and the revival of businesses. 

In light of all this, the Government of India has launched a comprehensive plan of action to fight coronavirus with an emergency response package worth ₹23,123 crores ($3 million) to mitigate issues that emerged during the second wave. The new Health Minister has announced that 240,000 medical beds and 20,000 ICU beds will be created under this scheme amid rising concerns of a third wave. Additionally, to address a shortage of oxygen, 1050 liquid medical oxygen storage tanks are scheduled to be installed with a medical gas pipeline system to accelerate the preparedness of hospitals. State governments too have started ramping up their efforts to better prepare their healthcare systems. For example, Delhi has launched plans to train 5,000 youths as health assistants for doctors and nurses while Maharashtra has decided to train 20,000. Such measures should strengthen India’s response if there is another spike in COVID-19 cases.

The central government has revamped its vaccination policy as well. It has now decided to buy 75% of the vaccines made for use in India as opposed to 50% earlier. It will then provide these vaccines to states to distribute for free. The remaining 25% of the vaccines can be bought by private hospitals and the amount they can charge has also been capped. The earlier policy did not work as half of the vaccines were purchased by the central government while the other half was left for the state governments and private hospitals to purchase. This led to states and private hospitals fighting against each other in the vaccine market and had to pay a higher price for the vaccine than the central government. The new policy has also expanded the eligibility criteria of vaccines being offered to all adults. 

The government, unlike last time, has not taken a passive role in addressing the lack of COVID appropriate behaviour and has subsequently issued warnings as people have started overcrowding tourist destinations. It has also acknowledged that the second wave might not be over yet. Although the number of cases nationwide are decreasing, states like Maharashtra and Kerala have recorded over 80,000 and 1,28,000 cases in the first 10 days of July. More recently, Kerala recorded over 26,000 cases on the 29^th of July which has subsequently forced the government to impose a weekend lockdown. Experts have warned that this could be the precursor for another wave as Maharashtra has shown similar trends in the past. 

The Indian government was caught off-guard during the onset of the second wave of the pandemic and its response was likewise. Professor Manoj Jha, MP emphasised on the complete collapse of the Indian healthcare system and the nightmare it faced during the second wave where the living struggled to get necessary supplies like oxygen, medicines etc and the dead did not even get dignity. That being said, preparations for mitigating a possible third wave have reportedly begun which will hopefully result in a more resilient, coordinated and effective response. 

The views expressed in this article are the author’s own, and may not reflect the opinions of the St Andrews Economist.