India: Recovery Stalled by Vaccine Games?

13 APRIL 2021

It's been a long journey for the COVID-19 disease. From a live meat market (or a lab in China, depending on what - or WHO - theory you believe) the SARS-Cov-2 virus has travelled across the world infecting 137 million people and claimed the lives of 3 million people across 221 nations and jurisdictions, as per data compiled by Worldometer.

The impact on the economy and on people's lives and mental stability will never be fully known. Stock markets surged in 2020 largely due to the fact that foreign governments were busy printing money or supporting their economies. India did comparatively little but flows from foreign lands boosted Indian share prices and - for those of us who have investments in equity mutual funds or directly in shares - our emotional pain was somewhat lessened by a feel good factor of wealth creation. We may not be so lucky in 2021.

India and UK: a contrast.

Many political leaders initially reacted with disdain to COVID believing that it will blow through (President Trump, USA), it's minor (Prime Minister Boris Johnson, UK) or a plot to keep us in fear (too long a list!).

In the early days many medical experts got it wrong. Dr. Fauci of USA said masks were not needed (he later covered up by saying that his statement was necessary then as there were not enough masks; in which case he may have assisted in the deaths of the misguided?) and CNN's Dr. Sanjay Gupta (who later mocked Trump) also parroting the same no-mask-needed recommendation. WHO announced a "mask is good" diktat in June 2020. Having learnt their lesson, many governments understood the need for building capacity of hospital beds, masks, PPE suits, medicines and vaccines. In Mumbai, we focused on building the Coastal Road, hidden from view behind barricades.

Pfizer, a large pharmaceutical company that may have been impacted by President Trump's election promise to shave off USD 300 billion in revenues to big pharma, announced the discovery of its vaccine a few days after voting in the US elections was complete: a mere coincidence. By then, the US and UK governments in particular, had already sown partnerships with a range of potential vaccine manufacturers pouring billions into risky efforts to find a solution. Though the UK was embroiled in the Brexit negotiations, their leadership had the capacity and the conviction to ensure that vaccines should be available to its citizens.

India and the UK have one thing in common: for both the countries, the Oxford or Astra Zeneca vaccine was the main candidate to fight COVID. An Indian company, Serum Institute, was supplying vaccines to India, the WHO, and to Astra Zeneca, UK under a licensing contract.

India challenged COVID in the Bharat way; the jugaad that is so often taken as home-grown genius but, many times, is a Band-Aid solution to an underlying problem that needs deep attention. From the initial and very necessary strict lockdown to banging thalis, lighting lamps, something about 9 pm on 9th of some month and 9 planets and the battle claim that we had something in our genetic structure, our diet, our natural immunity which would save us: we tried it all.

Just as poor information, bad decisions, or substandard equipment for our noble security personnel and soldiers has been identified as causes of unnecessary death, the lack of a solid shield against the virus - a coherent vaccine strategy - seems to have been the reason India is seeing a disturbing second wave.

Table 1: Martyrs all

Incident Year Indians killed
Kargil War 1999 527
Pulwama 2019 40
Covid-19 Cumulative, since March 2020 171,089
Covid-19 From Dec 8, 2020 when UK gave the first vaccine 29,691
COVID-19 From Jan 16, 2021 when India gave the first vaccine 18,633
Source: Worldometer, Google search

The UK has seen an alarming 127,100 deaths in total compared to India's 171,089 - even though India has 20x the population of UK. The virus kills older people: over 85% of those who died in the UK are above the age of 70. The average lifespan in UK is 80 years and in India is 70 years: Indians die earlier anyways, they don't need COVID to take them away from their loved ones.

The UK gave its first vaccine "jab" in December 2020 when its death count was 62,113. The second wave in UK was so vicious that 64,987 people have died since December 8, 2020. Despite the commencement of the vaccine programme more people in UK died in 4 months till April, 2021 than in the previous 8 months with nearly 550 deaths per day, on average, in the second wave. But the vaccination program in UK has now seen a dramatic decline in deaths from a peak of 1,612 per day on January 19, 2021 to less than 20 per day for the past few weeks.

The UK's policy of vaccinating as many people as possible with a "first jab" and delaying the "second jab" to be given after 10 to 12 weeks has built up some immunity in the system as everyone above the age of 55 years has received at least one jab. This is the most vulnerable age. While the vaccination was being implemented, the UK continued with lockdowns: no bars, pubs, restaurants, or shops were open (they opened on April 12 - with restrictions and mandatory masking).

Schools in UK remained closed till March 8. People could not meet inside homes. Since March 29, a group of up to 6 people could meet in open spaces. So, at one end the vaccine was being injected to minimise the impact of the virus and, at the other end, the virus was deprived of humans to jump from or jump to. With the planned opening up moving as schedule, it will be interesting to see how the UK cases evolve.

Like many developed nations, the UK has strained finances and - given Brexit - many challenges. Yet, since the announcement of the vaccine programme, the UK currency has been the strongest currency in the world because the expected success of its vaccination programme suggests a quicker recovery than in Europe or other parts of the world.

India, as many in the media are now exposing, never really had a vaccination strategy. Serum Institute has expressed its frustrations at the Modi government's inability to negotiate a price for the vaccines and book vaccines. Ministry of External Affairs data ( ) shows that 64.9 million vaccines have been exported. Of this 10.5 million were given as grants to many small nations and neighbours; 35.8 million were commercial exports (probably Serum Institute obligations under their license manufacturing contract to Astra Zeneca); and 18.6 million were part of the COVAX distribution managed by WHO for vaccines to poorer nations.

At the time of delivering these vaccines to many nations, we made the claim that we are the "pharmacist of the world". Faced with criticism from governments in the US, Canada and UK on the (still) ongoing farmers strike, India launched its vaccine diplomacy probably to counter the "illiberal government" accusations against the Modi government for its handling of the farmer protests. The "see the vaccines India has given to the world, now let's see what those so-called liberals have done", worked. No foreign government has been criticising us for the farmer protest, now mostly forgotten by the media.

We also boasted that we will help vaccinate the world. All good - but does the pharmacist have the vaccinations to treat its own citizens? People in foreign lands did not cast a vote for our government - Indian citizens did. While the counter-argument of "vaccine nationalism" is used by the WHO to criticise nations who are selfish, recall the principle of what the crew tell you on a flight (when we used to fly!). "In the event of a fall in cabin pressure, oxygen masks will come out. Kindly place the mask over your mouth and nose before helping other passengers." It is the same principle with the vaccine: nations need to close their borders, vaccinate their citizens, restore normalcy - and then place the vaccinations in the arms of other countries. It's harsh, it's not fair - but I doubt any WHO official is likely to place their oxygen mask on a fellow passenger if the plane was going down.

India has reportedly administered 100 million vaccinations. But some states claim they are running short of vaccines. Like the UK, will we declare that "jab 2" will be given after 8, 10, or 12 weeks? Recalibrate the vaccine distribution policy to suit the supply chain - and still be in line with the scientific evidence?

Will there be a strict lockdown as we administer the vaccine? Or are we willing to risk the surge in deaths that a vicious second wave could result in - as it did in the UK?

Or are state elections, the kumbh mela, a cricket match with 80,000 spectators at the new Modi Stadium, the central vista project, the coastal road in Mumbai, the deforestation of Goa, the deforestation of Araavali - so critical to the future of the nation (or the sponsors of these "nation-building" projects) such that the show must go on?

If the tone at the top does not suggest a lockdown of activity, how and why will people follow a selective lockdown for a few?

Table 2: Maharashtra gets the short end of the vaccine stick?

State Party in Power Vaccines Covid Cases Doses/Cases Elections Due In
    100% 100%  
Assam BJP 1.6% 0.1% 15.29 2021
Odisha Biju J D 3.9% 0.6% 6.42 2024
Bihar Janata Dal 4.2% 0.8% 5.43 2025
Gujarat BJP 9.4% 2.1% 4.51 2023
West Bengal Trinamool 7.5% 1.7% 4.43 2021
Rajasthan Congress 9.4% 2.2% 4.36 2023
Jharkhand Jharkhand MM 2.2% 0.9% 2.35 2025
Uttarakhand BJP 1.2% 0.5% 2.33 2022
Andhra Pradesh YSR Congress party 3.4% 1.5% 2.23 2024
Himachal Pradesh BJP 1.0% 0.5% 2.17 2023
Jammu and Kashmir President's Rule 1.2% 0.6% 2.11 2021
Uttar Pradesh BJP 8.3% 4.0% 2.06 2022
Madhya Pradesh BJP 5.2% 2.9% 1.82 2023
Tamil Nadu AIADMK 4.9% 3.1% 1.58 2021
Haryana BJP 2.7% 1.8% 1.56 2024
Telangana Telangana RS 2.3% 1.6% 1.47 2023
Kerala CPI (M) 5.0% 3.5% 1.44 2021
Karnataka BJP 6.3% 5.5% 1.16 2023
Delhi AAP 2.1% 2.4% 0.90 2025
Punjab Congress 2.0% 2.7% 0.74 2022
Goa BJP 0.2% 0.3% 0.70 2022
Chhattisgarh Congress 4.2% 7.0% 0.60 2023
Maharashtra Shiv Sena 9.5% 53.5% 0.18 2024
Source: Ministry of Health and Family welfare

A vaccine strategy needs to be based on data. If a state like Maharashtra is undergoing a breakout in terms of accounting for 53.5% of the cases in the country, it cannot be allocated just 9.5% of the vaccines distributed for a Vaccine / Case ratio of 0.18x.

Assam (15.29x) and West Bengal (4.43x) have elections and they were given a far higher share of vaccines compared to the number of cases they had. Was this to ensure that, as campaigning and voting begins, people must be better protected so that they would not be afraid to vote?

When an enemy attacks on one front, military resources are re-allocated. Many times, the High Command may decide to let that unit which is under attack die - in order to win a bigger war. That is a fair strategy: as long as we know what that bigger war is.

The data in the tables are already old as you read this. Data feeds are dynamic. The situation is dynamic. A team of specialists needs to make a-political decisions for a common good. This crisis of COVID was certainly not created by our government but how the central and state governments handle it, will determine not only the longevity of the population, but the state of the economy, the state of the stock markets and your overall investment portfolio.

There is no reason to change the 12-80-20 allocation to ride out the unknown. It has worked and will help us ride over a very rough patch. 2020 was a year of COVID and personal pain - but rising stock markets. 2021 will have the personal pain, but the stock markets may not be in high spirits.

Suggested allocation in Quantum Mutual Funds (after keeping safe money aside)

Quantum Long Term Equity Fund, Quantum Equity Fund of Funds, Quantum ESG India Fund Quantum Gold Savings Fund Quantum Liquid Fund
Why you
should own
An investment for the future and an opportunity to profit from the long term economic growth in India A hedge against a global financial crisis and an "insurance" for your portfolio Cash in hand for any emergency uses but should get better returns than a savings account in a bank
Suggested allocation 80% in total in both; Maybe 15% in QLTEF, 10% in Q ESG and 75% in QEFOF 20% Keep aside money to meet your expenses for 12 months to 3 years
Disclaimer: Past performance may or may not be sustained in the future. Mutual Fund investments are subject to market risks, fluctuation in NAV's and uncertainty of dividend distributions. Please read offer documents of the relevant schemes carefully before making any investments. Click here for the detailed risk factors and statutory information"
Disclaimer: The Honest Truth is authored by Ajit Dayal. Ajit is Founder of Quantum Advisors Pvt. Ltd. which is the Sponsor of Quantum Asset Management Company Pvt. Ltd – the Investment Manager of the Quantum Mutual Funds. Ajit is also the Founder of Quantum Information Services which owns Equitymaster and PersonalFN. The views mentioned herein are that of the author only and not of Quantum Advisors, Quantum AMC or Equitymaster. The information provided herein is compiled on the basis of publicly available information, internally developed data and other sources believed to be reliable by the author. The information is meant for general reading purpose only and is not meant to serve as a professional guide / investment advice for the readers. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investment. Whilst no specific action has been suggested or offered based upon the information provided herein, due care has been taken to endeavour that the facts are correct, accurate and reasonable as on date. None of the Author, Quantum Advisors, Quantum AMC, Equitymaster, their Affiliates or Representative shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary losses or damages including lost profits arising in any way on account of any action taken basis the data / information / views provided in The Honest Truth.

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5 Responses to "India: Recovery Stalled by Vaccine Games?"

KP Sankaranarayanan

May 15, 2021

In deed, a beautiful article with facts, figures and logic, and an eye opener too. Thank you.


Srinivasan Mudaliar

Apr 24, 2021

You would made the same points in a logical manner using the data charts without resorting to all those politically loaded statements about "liberal" versus "illiberal" governments in the middle paragraphs. We pay you for your skills in stock picking and NOT political analysis. So better stick to what you are good at.

If you want to do political slandering, please go and write to the 10's of so called news portals.

Lets see if this gets published, if you are really such a great liberal and can take criticism on the chin!!


satishchandra kulkarni

Apr 24, 2021

vaccines should be allocated according to population of the respective state. There will be less scope for criticism if population is adopted for vaccines allocation.


Ramesh B

Apr 19, 2021

half truth, if not less.
everything is fair in love and war and here too.
exports were not a bad thing overall. situation was not expected to as bad as now.
about west bengal elections, things are much more serious than vaccines!
thanks you are not 'positive'!
with regards. pl. keep writing! we like it really! best wishes...

Like (1)

Rajesh Malhotra

Apr 14, 2021

Sound considered advice!

Like (1)
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