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The Disaster in India – shortage of medicines, vaccines and oxygen in the “pharmacy of the world”

BNR News
BNR News
Saturday, May 15, 2021

"India is now the epicenter of the global pandemic. We have about 25 million cases of coronavirus-infected people. Officially, there are nearly 260,000 people who have died. According to statistics, we have about 350,000 new cases of infection daily and close to 4,000 deaths a day," Professor Gulshan Sachdeva, who teaches economics in New Delhi, describes the picture in India.

"During the first wave, as anywhere in the world, it was very difficult, but the situation was not so bad because India was in full lockdown. It was a really long lockdown imposed at the beginning of the pandemic. We must also take into account the fact that here the population is mostly young, compared to the European Union and the United States, the health effects of the pandemic were relatively mild. However, the economic consequences of these restrictive measures have been devastating."

That's why the government is refusing to introduce a national lockdown, as it did in March last year, said Professor Raj Bala - a law expert and professor in Kansas.

This full national lockdown has caused India's gross domestic product to shrink by 24 percent in the first quarter of 2020.

"Now there are imposed lockdowns on the ground - in different states according to the development of the situation there. For example, there is now a full lockdown in Delhi for a third, and maybe a fourth week will remain. The situation is similar in Mumbai, Maharadra state. These are increasingly economic centers where there are strict restrictive measures. No one knows when this situation will end. Of course, there are indications that the spike has already occurred in India- or at least in some states, but this is a very large country. There are other states where the peak of the pandemic is yet to come," adds Prof . Gulshan Sachdeva.

"The situation is really very difficult. India is a huge country where, of course, vaccines are produced. So far, about 170 million people have been vaccinated, but this is small against the backdrop of a global scale. India is considered the "pharmacy" of the world, but now there are no medicines, oxygen and other medical devices ."

"India is proudly called "the pharmacy of the world", but the irony in the current situation is that it can not even be a pharmacy for itself. There is an incredible shortage of vaccines against coronavirus. The problem is exacerbated by the way the government ensures the distribution of vaccines. Of course, it provides vaccines at a very low cost, even free for many people, but the vaccination process itself is left to the local authorities, it is decentralized," Raj Bala notes.

Prof. Pronab Sen, head of the International Center for Growth's Indian program, also finds no serious reason for optimism:

Ina large and integrated country, such as India, a lockdown in one place can affect the economy of other parts of the country - which are not in lockdown because supply chain problems inevitably arise.

"Hospitals, cities and villages, schools and universities, individual states - they have to compete with each other in the decentralized vaccine delivery scheme. Until the immunization process progresses significantly, and it can take a year or two, the Indian economy will grow more slowly," Raj Bala stressed.

Both Raj Bala and Pronab Sen confirm that the problem of a huge shortage of vaccines and drug-making products in India could become a global problem, as is currently the Indian version of Covid-19.

India has activated various measures to control and even block exports of pandemic-related materials. We are talking not only about personal protective equipment such as masks and gloves, but also about the active substances that are used for the manufacture of drugs. If India restricts its exports of substances and vaccines to sub-Saharan African countries, it will disrupt the vaccination process for their populations, points out Bala, who is extremely worried about the development of his home country's economy.

Gulshan Sachdeva shares this concern:

"The economy was shrinking even before that for various reasons, but then came the blow of the pandemic. It led to a nearly 8 percent decline in the economy in 2020 compared to a year earlier. This is the first time since independence was declared that India was in recession. However, a slight recovery has begun since September and growth has returned to a positive trajectory."

The severe economic picture leads to unemployment, which leaves entire families without income.

"Women who work as domestic workers lose the source of their income. The same applies to male general workers who work hard physically. People from lower castes or religious minorities - when they lose their jobs too, it also leads to a loss of income," Raj Bala said.

Prof. Pronab Sen looks at agriculture:

"Practically more employment in India is in the informal sector and it is much larger than you imagine. For example, employment in the agricultural sector is entirely outside the state sector, because there are no large farms here. We have small farms, but they attract a lot of manpower. Almost 50 percent of the workforce is employed in agriculture."

If there is good news, it is that a large part of India's exported industries in the IT sphere have already adjusted to work from home, and there the collapse is not so serious. For many families, however, there is another problem - members who work abroad cannot return to work.

'People who want to travel abroad can't do that at the moment. But those who are already out there stayed there. No one came back. They will continue to send some of what they earn overseas to their relatives in India," said Pronab Sen, who sees the only solution in mass vaccination.

"If fear remains, the forecasts in the medium term do not look good. First of all, it all depends on the efficacy of vaccines and people's confidence in them. If people believe them and the vaccination process works- I think in the medium term India will be able to return to its normal levels of growth."

Raj Bala India should involve the army in the vaccination process, not leave it to the local authorities. Polling stations that people know well should be used as checkpoints. The next step is fiscal measures, but there is also a catch here - they are related to debt collection.

India will soon become the country with the third-largest debt among developing countries after Brazil and Argentina. Their debt has a rating of "garbage", while the Indian 3 times B - only one level higher. It is highly likely that international rating agencies will lower their estimates of Indian debt to the lowest level because they argue that the economy needs to grow by 10 percent a year to stabilize India's very high debt and start reducing it."

And adding that accelerated growth usually leads to inflation growth that will not be borne by the population, the picture remains more than alarming. Why, having demonstrated a willingness to engage with its international partners, does India not receive assistance from them and do not develop its trade well enough?

"There were many opportunities before the pandemic in which India could liberalize its international trade regime. The tariffs it imposes are among the highest in the world. The regime is also quite restrictive for many types of services, such as lawyers. India continues to fail in this direction and suffers a lot of criticism, which I consider perfectly reasonable," Prof. Raj Bhala, who says geopolitically can influence some of the decisions of the country's government with the world's fifth-largest economy - is heading for disaster. Listen to the sound file.

Faculty name: 
Raj Bhala