COVID-19: State Bank of India report says cost of vaccinating 13 states estimated at 0.1% of GDP

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Vaccination should be the primary tool to curb the second wave of COVID-19 infections and not the lockdown, suggests a study by SBI released Friday.

“Now that states are free to buy vaccine from manufacturers from 1 May, our estimate for 13 states shows that the cost of vaccine to inoculate is almost 15-20% of states’ health expenditure budget (assuming half of the population in these states will get vaccinated by Central Government), still it will be only 0.1% of GDP. This is significantly lower than the economic loss in GDP due to lockdown which is already at 0.7% of GDP,” SBI said.

In India only 1.2% of population is fully vaccinated till now and the study estimates that by Dec’21, 15% of the population can be fully vaccinated and 84% can get their first shot. Experience of other countries show infections stabilise after 15% of population receive second dose, it added.

Increased production

“Serum Institute is expected to increase its production capacity to 110 million doses per month by July 2021, Bharat Biotech is expected to increase its production capacity to 12 million doses per month by July 21. Also, Sputnik vaccine will be imported from May onwards. Taking these into account, we believe a total of 1,132 million doses can be given by December 2021 in which 15% of the population can be fully vaccinated and 84% can get their first shot,” SBI said.

Also, given the current circumstances of partial/local/weekend lockdowns in almost all states, SBI has revised growth forecast downwards to 10.4% real GDP and 14.3% nominal GDP.

According to SBI, India did remarkably well in containing the first wave of infections, but as like in most other countries that faced unprecedented 2nd waves might have managed the 2nd wave better. In its previous forecast, SBI had suggested that the estimated peak time is 96 days from 15-Feb, indicating the peak happening in the 3rd week of May.

Further on the oxygen crisis, SBI said that the states should allow ambulance status to tankers so that they move faster, which will certainly help and reduce the transit time. And the government of India should analyse the oxygen data on a daily basis and direct supply. This is purely a supply chain optimization problem.