The Pandemic Reveals India’s Soft Underbelly

By Kollengode S Venkataraman

Simply focusing on the immediate problem and blaming Modi have given the Indian intelligentsia a convenient excuse to evade the serious introspection needed to get to the root causes to fix the problem. But in an unexpected way, the harsh reality came out when Mr. Adar Poonawalla, the CEO of the Pune-based Serum Institute of India (SII), was interviewed by The Times in London in April. Poonawalla’s SII is the No 1 producer of Covid vaccine in India. SII is the world’s largest vaccine manufacturer (over 1.5 billion doses sold in 170 countries), not only for Covid-19, but also for polio, diphtheria, tetanus, and others.

Poonawalla fled to London in April 2021, when powerful people in India threatened him with dire consequences if he did not give them the Covid vaccine ahead of others in direr straits.  In the interview Poonawalla said he got menacing phone calls from chief ministers of Indian states, heads of business conglomerates and others demanding instant supplies of the vaccines. This is what he told The Times:

“Threats is an understatement. The level of expectation and aggression is  unprecedented, overwhelming. Everyone feels they should get the vaccine. They can’t understand why anyone else should get it before them. The calls begin cordially, but when I explain that I cannot possibly meet the callers’ demands, the conversations go in a very different direction. They are saying if you don’t give us the vaccine it’s not going to be good. It’s not foul language. It’s the tone. It’s the implication of what they might do if I don’t comply. It’s taking control, not letting us do anything unless we give in to their demands.”

Modi’s government gave Poonawalla the highest-level security detail, but Poonawalla still felt threatened, and fled to London. His company is getting round-the-clock police protection. Poonawalla told The Times: “I’m staying here an extended time… I don’t want to be in a situation where… … you don’t want to guess what they are going to do.”

This is how the CEO of a company making a critical life-saving drug (desperately needed by over 1 billion Indians) is threatened. You can imagine how ordinary businesses in India are harassed by local politicians subtly demanding protection monies under the guise of fundraising and by senior bureaucrats slyly seeking bribes/favors to get their jobs done. And how millions of street vendors and shop owners routinely grease the palms of local police and low-level bureaucrats to avoid harassment. Businesses matter-of-factly take these bribes as “operating costs,” passing them on to their consumers. Thus, citizens directly bear the brunt of corruption in terms of high costs, and indirectly in terms of the poor quality of products and service for everything. 

India’s organized sector (large and midsize public and private companies, banks, healthcare, transportation, and others) sits on the loose sand of its unorganized, informal sector — daily wage earners, taxi drivers, domestic help, small farmers, vegetable vendors and millions of nano-entrepreneurs. The unorganized sector’s workers —~80% of India’s workforce — are not well-educated and are aware that most of them are not anglicized enough to ever join the organized sector. This class does not have the bonuses or other savings available to those in the organized sector. 

Out of this unorganized sector emerge leaders of raw politics. Those who succeed become elected officials running local, state, and federal governments, jumping ahead of the intelligentsia in wielding raw power. Many also end up in the underworld developing a symbiotic dependence with politicians, industrialists, and India’s polyglot film industry. Consider this: over 2500 sitting members of parliament and state legislatures in India have criminal cases against them. 

In this milieu, the Indian middle-class and above have nurtured their lifestyle over the last 50 years, developing a network with their socioeconomic equals and wannabes, with their myopic ideas on neighborhood and obligations to citizens at large. In India, in 2020, with 300 million people estimated to be in the middle class, only 58 million people filed income tax returns, with only 15 million actually paying income tax (

But the World Economic Forum ( reports that even in 2015, nearly 50 million people had disposable incomes of $10,000/year (INR 750,000/year). See the plot below.  With income tax levied for taxable incomes more than INR 250,000/year, Indians have perfected tax evasion. In the US, by comparison, 50% of households pay income tax.  

The Indian middle class demands all kinds of service without paying for them through taxes; but it is ever ready to berate governments for the problems du jour, such as the entirely predictable annual monsoon floods; and as is now the case, the Covid pandemic.  

In this milieu, the Indian middle class over the last 5 decades has developed a schizophrenic lifestyle. While physically living in affluent parts of Indian urban areas, they mentally live in Amsterdam, London, NYC, Boston, the Bay Area, Dubai, Singapore, Sydney…  Like American suburbanites, they insulate themselves from, and are oblivious to, local issues where they live. Because of their access to resources, they are well-informed, often well-travelled, with a network of contacts spread across the world. This class routinely and without any hesitation gets its jobs done ahead of others through their contacts with those in power and influence, or with bribes.

And then, in the second wave of the pandemic, the metaphorical excreta hit the fan, splashing it on everybody’s face. India’s middle and affluent classes are deeply embarrassed and angry. But instead of doing some serious soul-searching on why they are where they are today, they scream at Modi’s central government, making him personally responsible. In reality, though, they have been contributing to the problems for three generations.  

Educated Indians do not need any advice from outside experts to fix this problem. The Covid crisis will eventually force them to dispassionately look at themselves and reorganize their society on truly egalitarian ideas they all can agree on. They can study the models of Japan, Germany or the Scandinavian countries, where everybody pays their share of taxes for the state to provide decent education and quality preventive healthcare for all. The goal should be to give opportunities for today’s poor through education and enterprise and make them prosper to become tax paying citizens and thus help governments to pull up people below them.

They will have to abandon the laissez-faire model of unfettered free enterprise, the same way they abandoned the other extreme of the Soviet model state-controlled economy. After trying the Soviet model for 50 years, India had to abandon it when the whole nation was driven to the brink of bankruptcy in the late 1980s.

Everybody must give something to get something in return, both tangible and intangible. They do not have to look too far. They only need to go to their own traditions to learn of the mutual obligations of every segment of society to others.  END     


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