Decision Making as Output and Bounded Rationality

  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra

India's Vaccination Drive: What Next?

 

India seems to have seen the worst off the second wave of the Chinese pandemic. In cities like Delhi, the pandemic seems to have abated with the same pace in which it materialized in April. It is perhaps a mystery on the behavior of the pandemic in terms of its spread and consequent contraction in an equally swift time. While the country is recovering slowly from the pandemic, the vaccination program seems to be picking some pace. The recovery from the pandemic might be slow given the convexities involved, the pact of vaccination would determine the pace of recovery. If the vaccination pace is high, the chances of breakthrough infections and consequent mutations might decrease. In fact, it is in the global self-interest that the vaccination be carried out at a very fast pace. The global vaccination programs are still subject to the geopolitics and protectionism, despite the US announcing lifting of barriers in terms of supply of vaccine raw materials as also with export of excess vaccines available in the US. There are few cures that are emerging on the horizon but they are yet to gather pace to make a difference in terms of recovery time and sharp declines in mortality rates across the world.

 

If the vaccine pace is slow, there is a good chance of the virus mutating and able to break through the vaccine process. The vaccines need constant and continued reworking and upgradation but these would become problematic during the pandemic. In fact, the uniqueness of the current vaccination programme across the world is the fact, the vaccination is happening at the height of the pandemic. With large population unvaccinated, there is a good chance of spread being high and thus the breakthrough infections. While India might have got a breather for now, there is no time for complacency. India in fact should learn the hard lessons and be on preparation at highest possible alert for the next wave. The virus normally lie dormant for some period before materializing in full fury. The Spanish flu seems to have occurred in four waves at least globally with the second being the worst. India’s population experienced a decline over a ten year period of 1911-21 significantly because of the casualties due to the Spanish flu. If the pattern were to be repeated, the current pandemic induced by the virus from Wuhan seem to have to hit the peak and the subsequent waves might not materialize with the same fury. India might get the better of them yet this would mean committing the same mistakes what one did after the first wave.

 

The current strategy for India would have to be a mass vaccination at a very high scale to achieve a sort of herd immunity before the emergence of the third wave. In parallel, there must be significant preparation in terms of health infrastructure and thus reduce mortality in the subsequent emerging waves. Yet at this moment, India still seems to be progressing at a relatively slow pace. The pace of vaccine has picked up but the journey is too long. India has vaccinated close to 25 crore doses but these account for a very narrow fraction of the Indian population with the estimated requirements being in excess of 250 crore doses. The current number is impressive no doubt but the sheer population makes India become a laggard. Given the precarious condition of India’s health infrastructure, it would be advisable to keep this vaccination pace fast.

 

The current pace is around 30 odd lakhs per day which is expected to hit half a million per day in the next few weeks. The government has apparently promised every eligible Indian would be vaccinated before the end of this year. There was table of vaccines available including the number of doses expected before the end of this year. But many of the vaccines were still under trial and hence the table seemed to project a best case scenario rather than something realistic. If the government wants to follow up on its promise in all seriousness it needs to literally scale up the program by a multiple of quite few times as the existing number. At one crore doses per day, as mentioned in the previous posts, it might eight months or so the vaccinate the entire population. Looked in this context, the government projections seem very optimistic and perhaps lack a touch of reality.

 

The government as has been suggested before must prepare a realistic plan of vaccination. There is no point in overstating the intentions but underperforming in terms of outcomes. There is no room for underperformance given the heavy costs likely to be entailed in the prospective third wave. The government must go all out in ensuring the vaccination pace gathers steam to hit a crore vaccinations per day within a short period of time. Furthermore, the task is to sustain the same. The vaccination pace had gathered pace in early to mid-April before the second wave and consequent reframing of  the vaccination criteria put brakes and rather sharp ones at that on the vaccination. The External Affairs Minister did visit the US to iron out the inefficiencies in the vaccine supply chain. But that is just one part of the problem. The problem is more in the supply side domestically with the capacity being constrained significantly. Even if raw materials are available, the infrastructure constraints come into the picture. The ground work to get the facilities ready is very slow. For a country with superpower aspirations, these are significant pointers on the limitations of such aspirations. It is one thing to aspire yet another to have a look at the ground reality. This ground reality has to be countered. Irrespective of the vaccine, it needs to be produced in large numbers. These need vaccine manufacturing units. There are numerous units, many of which are lying idle. They should have been geared up months ago but everyone sat on the same till they were faced with the second wave fury. There is no time to lose at this moment. It is alright to pat on the back on these numbers which in absolute terms look impressive. They will just pale into reality if the increase in relative terms remain slow and India has the misfortune of facing the third wave with the economy already in significant trouble thanks to the lockdowns. India cannot afford a third wave neither can afford a third lockdown.

 

 

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