Path to normalcy via herd immunity

Normalisation of the economy requires consumers returning to traditional behaviour on discretionary expenditures. While we are all excited about vaccines, a strong impact of vaccines is some distance away. The more proximate source of normalisation in the coming six months is herd immunity. Better data holds the key to modified behaviour by individuals. Alongside this, greater wisdom in public health measures will help.

Many things are starting to look more normal in terms of the economy. As an example, the employment rate as seen in the CMIE household survey was at about 37 per cent in urban India at the start of the year. This reached a bottom of 24.37 per cent in April, and has recovered to 34.52 per cent in November. But the overall economic situation remains precarious. As an example, the consumer sentiment index dropped from the baseline of 100 to a low value of 36.83 in May. This has only come back to the value of 46 in November. Most households are not yet spending at their January-March 2020 levels. This has generated a demand shortfall in the macroeconomy.

In March, households pulled back from a great deal of discretionary spending for health and economic reasons. Individuals pulled back from stepping out of the house, and becoming customers of interaction-intensive services. It will be a good fillip for the economy, when one element of this (the health concerns) recedes, and households start spending more.

This does not constitute a complete answer to the economic problems. Economic uncertainty and balance-sheet stress for households and firms are also suppressing demand. But if health concerns were removed from the picture, that would give a fillip to consumption, which would help the demand side of the economy.

How will consumer behaviour normalise when it comes to the threat perception on health? One nice path to normalcy, for an individual, is to get the vaccine. While this is a sufficient condition, we should not expect a significant scale of vaccination till April 2021.

There is another channel at work: The spread of the disease. Covid-19 has been spreading strongly. Three studies illustrate the scale of ‘seroprevalence’, i.e., the share of the population which has experienced the disease and has antibodies.

A paper by Manoj Mohanan and co-authors did formal statistical sampling in Karnataka, from June 15 to August 29. They found that about half of Karnataka had antibodies. A study led by Nishant Kumar had found that in the days between October 5-10, 75 per cent of slum dwellers in South Mumbai had antibodies. A study by the Nagpur Municipal Corporation found that half of Nagpur had antibodies (October 15-November 5). The values do not stand still. When half of Karnataka had antibodies (June 15-August 29), this means the epidemic was going strong, then. A 100 days later, the numerical values will be significantly higher.

By the time we get to seroprevalence values like 75 per cent, we would have achieved ‘herd immunity’. When about three-quarters of the people have antibodies, if any one person (out of the remaining quarter) gets sick, the virus is likely to find nobody to jump to. Infection counts then start declining. Vaccination may be in motion by April 2021, but by that time the disease would have covered a good part of the Indian population.

Illustration: Ajay Mohanty
If a person knows she has antibodies and is largely safe, this suffices in terms of resumption of social activity. For 75 per cent of slum dwellers in South Mumbai, there is no need to be afraid, or wait for the vaccine.

To some extent, ordinary human instincts will generate good outcomes. All of us are quite sensitive to news about infection, hospitalisation, and deaths in our immediate circles. Each time we hear about someone we know who got sick, we ramp up precautions, and vice versa. With progress towards herd immunity taking place, many people are hearing less about sickness, hospitalisation or deaths in their circles. This is creating confidence and generating a normalisation of social activity.

In this situation, better information systems about seroprevalence will make a significant difference. Every municipal corporation needs to initiate weekly data release, based on a scientific statistical survey of the population of the city. This data release should be accompanied by various socioeconomic slices, so each person should obtain relevant information with average seroprevalence as of last week, among similar persons. This will permit better decision-making by individuals, which will help restore normalcy.

In the area of security, there is a phrase ‘security theatre’. This describes the impulse for policymakers to stage showy security responses with an eye on the spectacle. This is done with the objective of making people feel safer, even though these measures often make no genuine difference to safety. Similar problems are found in public health. All through 2020, state actors in India have had an eye on the propaganda objective, making announcements aimed at persuading people that the pandemic was being controlled. In this incipient recovery, it is better to avoid security-theatre announcements. It is particularly important to construct data, release the evidence, and make rational decisions based on facts. The announcement of tough measures will often not make a difference to the disease, but they will hamper the post-pandemic recovery by frightening individuals who think that authority figures know more.

To summarise, for many individuals in India, normalisation of behaviour is proceeding ahead of the vaccine. The vaccine will help remove residual doubt, but it is likely to be late when compared with the spread of the disease and the emergence of herd immunity. The problem of getting the vaccine out on scale in the country is not as important as is made out to be. The need of the hour is the release of data on seroprevalence, created through scientific surveys in each city, every week.

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