A research report by Emkay Global Financial Services says that stepping up the vaccination drive is the cheapest and best-suited policy to economic normalisation, given the strong positive externalities.
"The overall estimated welfare cost of vaccinating universal population would be 0.6-0.7 per cent of GDP, assuming no wastage and optimal distribution," Emkay's Lead Economist Madhavi Arora said.
"This is much lower than the current 0.9-1 per cent loss of monthly output amid existing soft local lockdowns, clearly implying a successful vaccine strategy is the cheapest optimal policy path to economic normalisation," she added.
The report recommends a production ramp-up to bridge the supply gap, expected to be an average of 170mn jabs per month by the end of '21. "The vaccination drive is skewed state-wise and has overall slowed substantially, with current '7 dma rate of 1.9mn shots, 50 per cent below the peak of 3.7mn' in March 21. The supply gap is significant and can only be resolved by production ramp-up. Even after assuming enhanced supply from July 21 and November 21, as per Emkay calculations, there will still be a supply gap of 170mn jabs per month on an average for covering universal population by end of this calendar year," it added.
The report further added that 100 per cent of the universal population would be vaccinated by July 2022.